As COVID-19 grew into a pandemic, consumers did what they usually do when disaster looms: flocked to retailers, clearing store shelves of essentials – toilet paper, hand sanitizer, soap. This consumer stockpiling urge also kicks in before hurricanes and is the subject of new research from the University of Maryland’s Robert H. Smith School of Business.
A negotiation model developed at the University of Maryland’s Robert H. Smith School of Business shows how supply chain networks can improve efficiency when manufacturers have different valuations or willingness to pay for the same component parts.
Yi Xu, associate professor of operations management at Maryland Smith, and Alper Nakkas from the University of Texas at Arlington describe their findings in Production and Operations Management.
Competition produces winners and losers. But game theory analysis shows how everyone comes out ahead when retailers and bankers cooperate to reduce finance costs for suppliers in China and other emerging markets. Consumers ultimately score when the savings get passed down the line.
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