Grant: Discovery Grants Program - Individual
University of Ontario Institute of Technology
$22,000.00
Competition and Contracting in Supply Chains
FY 2015-16
Summary
Modern supply chains are no longer vertically integrated enterprises, centrally managed by one decision maker,
but a collection of independent and highly specialized businesses with their own profit objectives often at odds
with those of the other partners in the supply chain. Large retailers play a central role and have a significant
influence on the overall supply chain. They stock variety of competing and substitutable products, similar in
their utility to the consumer. They have also introduced their own store brands, at the expense of national
brands, sold at a lower price and a higher profit, e.g., Loblaw's and President's Choice. One of the ongoing
challenges businesses have in relation to consumers, is the variability in demand for products. 70% of
stockouts are attributed to retail operations resulting in endless and expensive cycles of misallocation of
inventory, operational disruptions as well as higher prices for the consumer due to increased cost. Increased
competition is forcing retailers to focus on achieving overall cost reductions from all operations including those
of third parties. In literature, supply chains are studied from the viewpoint of a profit-maximizing supplier who
seeks to extract rent from retailers through appropriate contracting; however, few have analyzed the prominent role of large retailers offering store brands in this context. Impact of vendor or retail managed inventory systems, pricing, bargaining power, retailer's willingness to offer a competing store brand and level of vertical integration all influence the contracting negotiations between suppliers and retailers. These contracts can be mathematically and analytically evaluated and optimized. Such analysis will help design better supply chain contracts between suppliers and retailers; provide decision making framework for managers in terms of pricing, inventory, risk control and assortment of product offerings, resulting in lower costs for the business and lower prices for the consumers, who according to StatsCan, spent $37 Billion dollars on retail sales in May alone. The proposed research program will involve training of four HQPs over the duration of the grant.
Program
Discovery Grants Program - Individual
Location
Ontario, Canada
Recipient Type
Academia
Type
Grant
Source
NSERC's Awards Data
As published
Application id
386490-2012
Name nom
Surti, Chirag
Department département
Business and Information Technology, Faculty of
Organization id
19222
Institution établissement
University of Ontario Institute of Technology
Province en
Ontario
Province fr
Ontario
Country en
CANADA
Country fr
CANADA
Fiscal year exercice financier
2015
Competition year année de concours
2012
Award amount
22000
Program id
RGPIN
Program name en
Discovery Grants Program - Individual
Program name fr
Programme de subventions à la découverte - individuelles
Group en
Discovery grants programs
Group fr
Programmes de subventions à la découverte
Committee code
1509
Committee name en
Civil, Industrial and Systems Engineering
Committee name fr
Génie civil, industriel et des systèmes
Area of application code
520
Area of application group en
Manufacturing processes and products
Area of application group fr
Procédés et produits industriels
Area of application en
Production and operations management
Area of application fr
Production et gestion des opérations
Research subject code
1606
Research subject group en
Industrial engineering
Research subject group fr
Génie industriel
Research subject en
Operations management
Research subject fr
Gestion de la production
Partie
4
Nb partie
5
Application title
Competition and Contracting in Supply Chains
Keyword
NSERC
Application summary
Modern supply chains are no longer vertically integrated enterprises, centrally managed by one decision maker,
but a collection of independent and highly specialized businesses with their own profit objectives often at odds
with those of the other partners in the supply chain. Large retailers play a central role and have a significant
influence on the overall supply chain. They stock variety of competing and substitutable products, similar in
their utility to the consumer. They have also introduced their own store brands, at the expense of national
brands, sold at a lower price and a higher profit, e.g., Loblaw's and President's Choice. One of the ongoing
challenges businesses have in relation to consumers, is the variability in demand for products. 70% of
stockouts are attributed to retail operations resulting in endless and expensive cycles of misallocation of
inventory, operational disruptions as well as higher prices for the consumer due to increased cost. Increased
competition is forcing retailers to focus on achieving overall cost reductions from all operations including those
of third parties. In literature, supply chains are studied from the viewpoint of a profit-maximizing supplier who
seeks to extract rent from retailers through appropriate contracting; however, few have analyzed the prominent role of large retailers offering store brands in this context. Impact of vendor or retail managed inventory systems, pricing, bargaining power, retailer's willingness to offer a competing store brand and level of vertical integration all influence the contracting negotiations between suppliers and retailers. These contracts can be mathematically and analytically evaluated and optimized. Such analysis will help design better supply chain contracts between suppliers and retailers; provide decision making framework for managers in terms of pricing, inventory, risk control and assortment of product offerings, resulting in lower costs for the business and lower prices for the consumers, who according to StatsCan, spent $37 Billion dollars on retail sales in May alone. The proposed research program will involve training of four HQPs over the duration of the grant.
