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NON-COOPERATIVE BEHAVIOR IN INTERACTION OF DISTRIBUTION CENTERS
Keywords:
regional distribution centers, game theoretical model.DOI:
https://doi.org/10.17654/0974165823057Abstract
The timely fulfillment of customer orders is a crucial issue for all companies, as it improves the relationship between companies and their customers. Given the negative impact of late deliveries on company profits, companies invest resources in defining and implementing strategies that help address delivery times on time and minimize transportation costs. One of these strategies is the establishment of Regional Distribution Centers (RDCs) in strategic locations, which serve as intermediaries between companies and their consumers. Through a game theoretical model, this article analyzes the strategic interaction between rented and owned RDCs since they have different objectives. In such a case, RDCs’ interaction casts similarities with the Prisoners’ Dilemma. Likewise, we provide empirical evidence about the previous behavior by considering data from a Mexican company.
Received: February 3, 2023
Accepted: March 28, 2023
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