Trading reserved capacity independently among supply chains

Yick Hin Hung, Yuk On Li, Edwin Tai Chiu Cheng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)


We propose a novel mechanism for pooling the reserved capacity (super capacity) of different supply chains, so that they can more effectively match their single-period inventory supplies with their demands. Through this mechanism, retailers can buy or sell unutilized super capacity independently as a commodity in a sub-industry before and during the selling season, which helps improve supply flexibility and increase the utilization of suppliers reserved capacity. Our findings provide a new channel coordination strategy for a group of supply chains to hedge against capacity and inventory risks by trading super capacity with their competitors, which yields individual and aggregate benefits.
Original languageEnglish
Pages (from-to)105-112
Number of pages8
JournalInternational Journal of Production Economics
Issue number1
Publication statusPublished - 1 Sep 2011


  • Alternative inventory
  • Co-opetition game
  • Super capacity

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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