NDLI: Serial cost allocation in the cooperative purchasing organization

Content Provider	Springer Nature Link
Author	Zhang, Tao Gu, Tian zhou Song, Xin shuai Gu, Feng
Copyright Year	2013
Abstract	Under the seller’s quantity discount, buyers self-organize or rely on a third party to aggregate their purchasing quantities to obtain lower prices. Because of the unequal member contributions in the cooperative purchasing organization, the buyers’ strategy is different, the members often fluctuate, and the organizations do not sustain themselves. An effective mechanism is necessary to improve the performance of purchasing groups. We study the various forms of cost allocation mechanism in practice. Different allocation rules may have influence on the buyers’ behavior (i.e., purchasing quantities, whether joining the organization or not). We analyze the serial cost allocation and equilibrium purchasing quantity based on a Nash equilibrium, and the results show that each buyer is worse off when not participating in the existence buying organization of the other buyers. We further find that the serial mechanism just confirms the most efficient Nash equilibrium: reasonable cost allocation rule is necessary for the subjects to identify their optimal strategy.
Starting Page	749
Ending Page	755
Page Count	7
File Format	PDF
ISSN	10071172
Journal	Journal of Shanghai Jiaotong University (Science)
Volume Number	18
Issue Number	6
e-ISSN	19958188
Language	English
Publisher	Springer Berlin Heidelberg
Publisher Date	2013-12-01
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	serial cost allocation quantity discounts cooperative purchase cooperative game Electrical Engineering Materials Science Computer Science Architecture Life Sciences
Content Type	Text
Resource Type	Article
Subject	Multidisciplinary

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