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Capacity allocation with competitive retailers

Published: 13 August 2006 Publication History

Abstract

This paper addresses a problem in supply chain management that how scarce resources can be efficiently allocated among competing interests. We present a formal model of allocation mechanisms for such settings that a supplier with limited production capacity allocates its products to a set of competitive retailers. In contrary to the existing allocation mechanisms in which retailers are local monopolists, the new model exhibits much more complicated market behaviors. We show that the widely-used proportional allocation mechanism is no longer necessarily Pareto optimal, even if all retailers are in a symmetric situation. A necessary and sufficient condition for the proportional allocation to be Pareto optimal is given. We propose a truth-inducing allocation mechanism based on our capacity allocation model, which is more intuitive and applicable than the existing truth-inducing mechanisms.

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cover image ACM Other conferences
ICEC '06: Proceedings of the 8th international conference on Electronic commerce: The new e-commerce: innovations for conquering current barriers, obstacles and limitations to conducting successful business on the internet
August 2006
624 pages
ISBN:1595933921
DOI:10.1145/1151454
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 13 August 2006

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Author Tags

  1. allocation mechanism design
  2. game theory
  3. oligopoly

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ICEC '06 Paper Acceptance Rate 53 of 112 submissions, 47%;
Overall Acceptance Rate 150 of 244 submissions, 61%

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  • (2022)Quantum game approach for capacity allocation decisions under strategic reasoningComputational Management Science10.1007/s10287-022-00424-019:3(491-512)Online publication date: 19-Mar-2022
  • (2012)Capacity Allocation over a Long HorizonManufacturing & Service Operations Management10.1287/msom.1110.034614:1(24-41)Online publication date: 1-Jan-2012
  • (2011)Capacity AllocationWiley Encyclopedia of Operations Research and Management Science10.1002/9780470400531.eorms0132Online publication date: 14-Jan-2011
  • (2009)Online Network Resource Allocation Mechanism with the Continuous High SatisfactionProceedings of the 2009 Second International Symposium on Information Science and Engineering10.1109/ISISE.2009.32(254-258)Online publication date: 26-Dec-2009
  • (2008)Mechanism design for capacity allocation with price competitionProceedings of the 10th international conference on Electronic commerce10.1145/1409540.1409598(1-10)Online publication date: 19-Aug-2008

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