REVISTA DYNA MANAGEMENT

Key words:

Árboles de Decisión, Cadena de Suministro, Coaliciones, Análisis de Decisiones, Cooperación, Decision Trees, Supply Chain, Coalitions, Decision Analysis, Co-operation

Article type:

ARTICULO DE INVESTIGACION / RESEARCH ARTICLE

Section:

RESEARCH ARTICLES

It is widely assumed that the coalition of supply chain stages brings benefits to the joining members. This work shows that this is not always the case, exposing conditions in which the coalition profit is smaller than the sum of the profits that the coalition members would have obtained acting separately. This is done by considering a three stages supply chain, and developing a model for its rational behavior using decision trees and the criteria of maximum expected profit. Each chain member decides how much product to buy and at what price to sell it, based on his beliefs of the volume that may be sold at a given price. For a coalition, a decision tree includes the decisions of its members, aiming to maximize the expected sum of their profits. The analysis of the decision trees reveals that, under the model assumptions, a coalition has a higher propensity than its separated members to purchase high volumes of product, and coalition decisions are indifferent to the internal profit distribution. The comparison between the coalition profit and that of the separated members is done numerically. It was found that the expected coalition profit is always equal or bigger than the sum of the expected profits of its separated members. However, the actual coalition profit is frequently less than the sum of the actual profits of the separated members, this depending heavily on the probabilities that the coalition and its customer assign to their likeliness of selling high volumes. As the used model represents a logical framework that includes the basic, minimum aspects of the behavior of a real supply chain, the results are relevant to businesses that, in actual life, consider forming a coalition with a supplier or client.