In-house production and sourcing competition under demand uncertainties

Document Type

Article

Publication Title

IFAC-PapersOnLine

Abstract

In this paper, we consider a supply chain where two buyers compete by investing in in-house capacity and outsourcing the remaining part of its production requirements to a common supplier to serve their individual markets with uncertain demand. The supplier has the option to sell capacity to these buyers and to an alternative market with random demand. We determine the buyers’ optimal sourcing and in-house production capacity decisions under such scenario.

Publication Date

1-6-2015

Publisher

Elsevier

Volume

Vol.48

Issue

Iss.3

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