********************************************************************


                                                     Seminar

             Department of Systems Engineering and Engineering Management
                                  The Chinese University of Hong Kong

------------------------------------------------------------------------------------------

　

　

　

Title

:

Delegation, commitment and bargaining in a three-tier supply chain

　

　

　

Speaker

:

Prof. Pengfei Guo

　

　

Faculty of Business

　

　

Hong Kong Polytechnic University

　

　

　

Date

:

October 22th, 2007 (Monday)

　

　

　

Time

:

4:30 p.m. - 5:30 p.m.

　

　

　

Venue

:

Room 513

　

　

William M.W. Mong Engineering Building

　

　

(Engineering Building Complex Phase 2)

　

　

CUHK

　

　

　

------------------------------------------------------------------------------------------

Abstract:
　

We analyze and compare two outsourcing structures in a three-stage supply chain consisting of an OEM, a CM and a supplier: consignment and turnkey. The key difference between the two structures is whether the OEM delegates the procurement function to the CM. Without delegation ( consignment ), the OEM contracts separately with the CM and with the supplier; with delegation ( turnkey ), the OEM contracts with the CM, and the CM subcontracts with the supplier. We model the procurement activity as a two-period bargaining game with one-sided offer and one-sided information. In each period, the uninformed party offers a wholesale price to the informed party who has private information about its production cost. The informed party decides to take it or leave it. We consider three situations on players' endowed commitment power: (1) full commitment, any downstream party has commitment power over any upstream party; (2) partial commitment, no downstream parties has commitment power over the supplier; (3) no commitment, no any party has commitment power over another party. We derive the subgame perfect Nash equilibrium for each bargaining game under different situations. We compare the OEM's expected profit in equilibrium across different cases and show that turnkey tends to be preferable when the OEM has less information on the CM's and the supplier's costs and when both the OEM and the CM have no commitment power over the supplier.


-------------------------------------------------------------------------------------------

Biography:
　

GUO Pengfei received his PhD degree in Business Administration from Duke University in 2007. He received his B.Eng. in MIS from Xi'an Jiao Tong University in 1993 and M.S. in Management Science and Engineering from Shanghai Jiao Tong University in 1997. He is now an assistant professor with the Faculty of Business, Hong Kong Polytechnic University. His research interests include multiple-tier supply chain management, stochastic process and its application in service systems, and dynamic pricing and capacity management. His research work has appeared on Management Science.


************************* ALL ARE WELCOME ************************

　

　

　

Host

:

Prof. Sean X. Zhou

Tel

:

(852) 2609-8336

Email

:

zhoux@se.cuhk.edu.hk    

　

　

　

Enquiries

:

Prof. Nan Chen or Prof. Sean X. Zhou

　

:

Department of Systems Engineering and Engineering Management

　

　

CUHK

Website

:

http://www.se.cuhk.edu.hk/~seg5810

Email

:

seg5810@se.cuhk.edu.hk

　

　

　

********************************************************************