Implementation of optimal schedules in outsourcing with identical suppliers

This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to...

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Bibliographic Details
Published in:Mathematical methods of operations research (Heidelberg, Germany) Germany), 2019-04, Vol.89 (2), p.173-187
Main Authors: Hamers, Herbert, Klijn, Flip, Slikker, Marco
Format: Article
Language:English
Subjects:
Business and Management
Calculus of Variations and Optimal Control
Optimization
Decision making
Mathematics
Mathematics and Statistics
Operations research
Operations Research/Decision Theory
Original Article
Production scheduling
Schedules
Suppliers
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Summary:This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to a socially optimal schedule. For the case of single demand the shortest-first mechanism implements optimal schedules in Nash equilibrium. We show that for the general case there exists no anonymous mechanism that implements optimal schedules in correlated equilibrium.
ISSN:1432-2994
1432-5217
DOI:10.1007/s00186-018-0645-1