Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision
This study investigates the manufacturer's contract choice (drop-shipping or batch ordering) and retailer's information sharing strategy in the presence of product quality decisions. The equilibrium outcomes give strategic choices for both the manufacturer and retailer. Specifically, the r...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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KeAi Communications Co., Ltd.
2022-06-01
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| Series: | Journal of Management Science and Engineering |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096232021000676 |
| _version_ | 1811328489757868032 |
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| author | Jinqiong Lei Musen Xue |
| author_facet | Jinqiong Lei Musen Xue |
| author_sort | Jinqiong Lei |
| collection | DOAJ |
| description | This study investigates the manufacturer's contract choice (drop-shipping or batch ordering) and retailer's information sharing strategy in the presence of product quality decisions. The equilibrium outcomes give strategic choices for both the manufacturer and retailer. Specifically, the retailer prefers to share demand information when the quality investment efficiency is high under batch ordering contract, while he always chooses to share information under drop-shipping contract. Given no information sharing, the manufacturer chooses the batch ordering contract if the revenue-sharing rate is high. Given information sharing, the manufacturer prefers batch ordering contract when either of the following conditions holds: a) when the revenue-sharing rate is low and quality investment efficiency is low; b) when the revenue-sharing rate is high and quality investment efficiency is high; otherwise, the manufacturer prefers drop-shipping contract. Additionally, our results indicate that there may exist a “prisoner's dilemma” when the drop-shipping contract is a dominant strategy for the manufacturer and sharing demand information is a dominant strategy for the retailer. |
| first_indexed | 2024-04-13T15:26:02Z |
| format | Article |
| id | doaj.art-d7eaf523b43b4152a91b3e911f3f564a |
| institution | Directory Open Access Journal |
| issn | 2096-2320 |
| language | English |
| last_indexed | 2024-04-13T15:26:02Z |
| publishDate | 2022-06-01 |
| publisher | KeAi Communications Co., Ltd. |
| record_format | Article |
| series | Journal of Management Science and Engineering |
| spelling | doaj.art-d7eaf523b43b4152a91b3e911f3f564a2022-12-22T02:41:30ZengKeAi Communications Co., Ltd.Journal of Management Science and Engineering2096-23202022-06-0172287302Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decisionJinqiong Lei0Musen Xue1School of Management, Tianjin Normal University, Tianjin, 300387, ChinaCorresponding author.; School of Management, Tianjin Normal University, Tianjin, 300387, ChinaThis study investigates the manufacturer's contract choice (drop-shipping or batch ordering) and retailer's information sharing strategy in the presence of product quality decisions. The equilibrium outcomes give strategic choices for both the manufacturer and retailer. Specifically, the retailer prefers to share demand information when the quality investment efficiency is high under batch ordering contract, while he always chooses to share information under drop-shipping contract. Given no information sharing, the manufacturer chooses the batch ordering contract if the revenue-sharing rate is high. Given information sharing, the manufacturer prefers batch ordering contract when either of the following conditions holds: a) when the revenue-sharing rate is low and quality investment efficiency is low; b) when the revenue-sharing rate is high and quality investment efficiency is high; otherwise, the manufacturer prefers drop-shipping contract. Additionally, our results indicate that there may exist a “prisoner's dilemma” when the drop-shipping contract is a dominant strategy for the manufacturer and sharing demand information is a dominant strategy for the retailer.http://www.sciencedirect.com/science/article/pii/S2096232021000676Drop-shippingInformation sharingPrisoner's dilemmaGame theory |
| spellingShingle | Jinqiong Lei Musen Xue Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision Journal of Management Science and Engineering Drop-shipping Information sharing Prisoner's dilemma Game theory |
| title | Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision |
| title_full | Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision |
| title_fullStr | Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision |
| title_full_unstemmed | Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision |
| title_short | Drop-shipping or batch ordering: Contract choice in the presence of information sharing and quality decision |
| title_sort | drop shipping or batch ordering contract choice in the presence of information sharing and quality decision |
| topic | Drop-shipping Information sharing Prisoner's dilemma Game theory |
| url | http://www.sciencedirect.com/science/article/pii/S2096232021000676 |
| work_keys_str_mv | AT jinqionglei dropshippingorbatchorderingcontractchoiceinthepresenceofinformationsharingandqualitydecision AT musenxue dropshippingorbatchorderingcontractchoiceinthepresenceofinformationsharingandqualitydecision |