1. Essays on Supply Chain Competition and Coordination of Operations with Finance
- Author
-
Hu, Qiaohai (Joice)
- Subjects
- supply chain, competition, equilibrium, decentralized, centralized, airline, hub-and-spoke, point-to-point, economy of density, flexibility, capital structure, inventory, production, bankruptcy, taxes, multi-stage, base-stock
- Abstract
This dissertation consists of four essays related to supply chain competition and coordination of operational and financial decisions. The first essay models dynamic oligopoly supply chain games. The results include circumstances in which an echelon base-stock policy is not a best competitive response. The second essay investigates how airlines might determine their network structures through a three-stage duopoly game. We find that at equilibrium either both airlines use hub-and-spoke networks or both use point-to-point networks. Furthermore, a hub-and-spoke network does not necessarily dominate a point-to-point network; and a high demand variance or a low mean demand generally favors a hub-and-spoke network. The third essay examines a model with a financial criterion and investigates the interdependence of a firm’s capital structure and its short-term operating decisions concerning inventories, dividends, and liquidity. We conclude that the optimal inventory policy does not depend on the firm’s capital structure, but the optimal dividend and liquidity policy does depend on the inventory decisions. The optimal capital structure depends only on the marginal tax rate, the interest rate for long-term bonds, and the decision maker’s interest rate for intertemporal tradeoffs. The fourth essay studies a serial multi-stage manufacturing system whose decision-maker maximizes the expected present value of dividends via periodic decisions concerning production quantities at each echelon, dividends, and short-term borrowing. We show that the liquidity constraint and multiple stages cause echelon base-stock policies to be sub-optimal.
- Published
- 2006