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Industrial Engineering & Operations Research
Master of Science in Industrial Engineering and Operations Research (M.S.I.E.O.R.)
Year Degree Awarded
Month Degree Awarded
Supply Chain Consumer Returns Asymmetric Game
Within this thesis we investigate the effect of asymmetric agent decision making on the coordination of a two echelon supply chain facing consumer returns. On the basis of the classical newsvendor setup, supply chain players may face stochastic, or stochastic and price-dependent demand. We consider consumer returns to be either (1) a specific percentage of sold products, or (2) dependent on the retail price. Given the lack of coordination of the decentralized supply chain, we not only consider wholesale price-only contracts but also examine a buy-back option, where the manufacturer offers to buy back unsold items from the retailer at the end of the selling period. In all cases, we perform comprehensive computational studies to examine how decision variables and profits are affected by asymmetric versus symmetric decision making. In the asymmetric cases only one supply chain player includes consumer returns in his optimization process. Furthermore, as asymmetric behavior indicates the existence of a prisoner's dilemma, we conduct a game theoretic analysis which delivers interesting insights on the value of information sharing.