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Sourcing Dilemma in Supply Chain: Does Signalling Help!

CASELET, OPERATIONS MANAGEMENT
ET Cases, 3 Pages

Case Preview

Sourcing Dilemma in Supply Chain: Does Signalling Help!

 

Unimart Ltd. is a well-known retail store based out of Nagpur. It procures varied products depending on the demand forecast for a particular period. However, due to stiff competition from other retail stores, the company observed a substantial fluctuation in the demands that realized in the actual period, which was in turn creating  problems to its main sourcing company Xenon Ltd.

Xenon Ltd. (Xenon) had three large manufacturing units specially designed to cater to the needs of retailers like Unimart Ltd. The outcome of such fluctuations is forcing Xenon to devise a mechanism to know the expected demand of the products at the retailer level.

The operations management team at Xenon was deliberating if they could have an information sharing alliance regarding the demand to be realized at the retailer level. There however, was a risk that the retailer may not share an accurate picture of the demand levels in each period............

Teaching Note Preview

Sourcing Dilemma in Supply Chain: Does Signalling Help!

 

Synopsis

The caselet attempts to highlight the significance of game theory in understanding the behavior of supply chain partners. The caselet enables an illustration using two coordinating games such as prisoner's dilemma and assurance game, which can be utilized to aid in the strategic decision making of supply chain players. This caselet also throws light on the reasons of cooperation leading to supply chain alliance and the causes of defection post agreement between different  players and stakeholders in a supply chain.

Expected Learning Outcomes

  • -Appreciate the application of Game Theory in formulating Supply Chain Strategy
  • -Sensitize the students about the relevant supply chain dilemma in the context of sourcing and how to resolve such issues at the channel level
  • -Understand how signalling affects the strategic decisions of players in the game


Case Positioning and Setting

This case is beneficial for students intending to specialize in the area of Supply Chain Management. The case can be used as one of the sessions for 'Supply Chain Management' or 'Supply Chain Sourcing' or 'Sourcing and Procurement' course for the MBA program.

Assignment Questions

  • I. What should be the strategy to be adopted in Scenario A (Exhibit I) and why? State the conditions wherever applicable.
  • II. What should be the strategy to be adopted in Scenario B (Exhibit II) and why? State the conditions wherever applicable.
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Product code: OM-2-0040, OM-2-0040A

Abstract

The rapid increase in international sourcing arrangements with the intention of forging certain cost and technological advantages have captured the interest of many academicians and supply chain analysts. Global Sourcing strategies have been thoroughly studied in the academic literature for the past decade. However, the  increasing product complexity with its inherent product life cycle coupled with the accelerating technological advancement has increased the need to understand why such purchasing relationships are important and how such alliances are managed. This caselet offers a game theoretic lens to understand the social dilemmas in similar supply chain setting. This caselet will also enable to comprehend the conditions or situations under which strategic alliances take shape among supply chain channel partners.



Pedagogical Objectives

  • To appreciate the application of Game Theory in formulating Supply Chain Strategy
  • To sensitize the students about the relevant supply chain dilemma in the context of sourcing and how to resolve such issues at the channel level
  • To understand how signalling affects the strategic decisions of players in the game

Case Positioning and Setting
This caselet is beneficial for participants intending to specialize in the area of Supply Chain Management. The caselet can be used in MBA Programs for the following modules/courses 'Supply Chain Management' or 'Supply Chain Sourcing' or 'Sourcing and Procurement'



This Case Pack Includes:
- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
$3.66
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