Procurement and information sharing games in group purchasing

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2014
Ünel, Sevgi
In this thesis, the value of collaboration and information sharing is analyzed for a market with two asymmetric competitive buyers. On one side of the chain, the supplier offers quantity discount. On the other side of the chain, the buyers may or may not engage in collaboration on purchasing quantity. The price is inverse linear function of the quantity supplied in the market. Buyers may receive a signal about uncertain market demand. Each buyer decides whether to share the signal with the other buyer and the supplier. First, four different cases are analyzed: (i) information is shared between the buyers and with the supplier, (ii) information is shared only between the buyers, (iii) neither the buyers nor the supplier shares the information, and (iv) buyers share the information only with the supplier. For each case optimum order quantity and whole sale price are calculated for both collaboration and no collaboration setting. Second, computational analysis is conducted by using the deducted results in order to determine the profit values of the parties. This leads to the following insights. First, if the market base is low for a buyer, it is substituted by other buyer. Second, the whole supply chain, supplier and weak buyer are better under collaboration setting however, the strong buyer is better only if the competition is low. Last, the supplier prefers to receive the signal, while the strong buyer is willing to share the signal with the supplier only if the difference between market bases is low.

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Citation Formats
S. Ünel, “Procurement and information sharing games in group purchasing,” M.S. - Master of Science, Middle East Technical University, 2014.