Department of Systems Engineering and Engineering Management,

                    The Chinese University of Hong Kong


Competition in Multi-Echelon Distributive Supply Chains@

Dr. Deming Zhou
Department of Decision Sciences and Managerial Economics
The Chinese University of Hong Kong

Date : October 26, 2005 (Wednesday)

Time : 5:30 p.m. - 6:30 p.m.

Venue : Room 513, William M.W. Mong Engineering Building

(Engineering Building Complex Phase 2), CUHK

We study competition in multi-echelon supply chains with a distributive
structure. Firms in the supply chain are grouped into homogeneous sectors that
contain identical firms with identical production capabilities that all
produce exactly one undifferentiated product. Each sector may distribute its
product to several different downstream sectors, and each sector is only
supplied by a single upstream sector. The demand curves in final markets are
assumed to be linear, as are the variable costs of production in all sectors.
Competition is modeled via the Successive Cournot model in which firms choose
production quantities for their downstream market so as to maximize their own
profits, given prices for the input. Under these assumptions, equilibrium
prices, quantities, and firm-level profits for any multi-echelon distributive
network can be derived. We discuss the network transformation properties, and
by using these properties, we examine the effect of demand parameter changes
and cost changes on any firm's equilibrium price, quantity, and profit. We
also explore the effects of entry on the equilibrium solution. While the
effects of upstream entry on downstream sectors are as expected, the effect of
downstream entry on upstream sectors, and therefore on sectors in parallel
(lateral) paths can be quite counter-intuitive.


Dr. Deming Zhou holds a Bachelor of Engineer and Master of Management Science
and Engineering from Tsinghua University and a Ph.D in Management from the
Anderson School of Management at UCLA. He joined the Dept. of DSE of the
Faculty of Business Administration at CUHK in 2005 as Assistant Professor.

Deming Zhou's research interests are in supply chain contract design, supply
chain competitions, and health care related inventory issues. He has one
contract paper published in Management Science, and several papers under
review in other journals.

Deming Zhou is a member of INFORMS, DSI, and CSCMP, and has served as a
reviewer for the journals: Management Science, Marketing Science, and


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

Host : Prof. Janny M.Y. Leung
Tel : 26098238
Email : janny@se.cuhk.edu.hk

For more information please

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