Abstract
This paper considers co-investment in a supply chain infrastructure using an inter-temporal model. We assume that firms' capital is essentially the supply chain's infrastructure. As a result, firms' policies consist in selecting an optimal level of employment as well as the level of co-investment in the supply chain infrastructure. Several applications and examples are presented and open-loop, as well as feedback solutions are found for non-cooperating firms, long- and short-run investment cooperation and non-simultaneous moves (Stackelberg) firms. In particular, we show that a solution based on Nash and Stackelberg differential games provides the same level of capital investment. Thus, selecting the leader and the follower in a co-investment program does not matter. We show that in general, co-investments by firms vary both over time and across firms, and thereby render difficult the implementation of co-investment programs for future capital development. To overcome this problem, we derive conditions for firms' investment share to remain unchanged over time and thus be easily planned.
Original language | English (US) |
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Pages (from-to) | 265-276 |
Number of pages | 12 |
Journal | European Journal of Operational Research |
Volume | 192 |
Issue number | 1 |
DOIs | |
State | Published - Jan 1 2009 |
Keywords
- Control
- Gaming
- Investment analysis
- Supply chain management
ASJC Scopus subject areas
- General Computer Science
- Modeling and Simulation
- Management Science and Operations Research
- Information Systems and Management