The Contract Transformation: A Framework
for
Network Supply Chain Analysis and Design
Pranab Majumder
Fuqua School of Business, Duke University
In
this paper we will propose a framework which will allow us to model large scale
supply networks. These networks procure
from multiple locations in a variety of procurement formats, and produce and
sell in multiple locations. Our objective is to analyze the behavior of such
chains, and we will formalize many practices that have thus far been described
but not modeled in the literature. We
take an industrial organization (IO) perspective on large scale supply
networks. Specifically, our work is a
generalization of the von Stackelberg formulation in Spengler (1950) to model acyclic supply networks where any
member of the chain can be the overall Stackelberg
leader.