Supply Chain Network Design

My paper, Supply Chain Network Design Under Profit Maximization and Oligopolistic Competition, has now been officially published and it appears as the lead article in volume 46, number 3, of the journal Transportation Research E, pages 281-294.

The mathematical model that I developed in this paper can be applied to the design of supply chain networks where there is oligopolistic competition as in such industries as: freight carriers, airlines, certain beverage (including beer) manufacturers, oil companies, and wireless carriers, among others. The competitive formalism that I utilize is that of Nash equilibrium and I show that the governing equilibrium conditions can be formulated as a variational inequality. The algorithm that I propose and apply to compute the equilibrium product flows, along with the capacities on the various links, yields closed form expressions (very elegant and easy and fun to implement). For those who are interested, you can read up on this methodology in my Network Economics: A Variational Inequality Approach book.

I presented this work late last month at the Symposium on Transportation Network Design and Economics at Northwestern University, and the presentations given at this symposium have now been posted on the above link. My presentation is also available here.

This symposium was organized by the Transportation Center at Northwestern in honor of the visit of Professor Martin Beckmann and I blogged in an earlier posting on the great success of this symposium. Professor Hani S. Mahmassani is the Director of this Transportation Center and he, along with Professor David E. Boyce, were instrumental in getting this symposium organized and much of the success of it is due to them.

In the meantime, I received a lovely note from Professor Beckmann who wrote how much he enjoyed my fine paper. Needless to say, the fact that he took the time to write such a personal note is very meaningful to me.