Multi-product supply chain horizontal network integration: models, theory, and computational results

In this paper, we develop multiproduct supply chain network models with explicit capacities, prior to and post their horizontal integration. In addition, we propose a measure, which allows one to quantify and assess, from a supply chain network perspective, the synergy benefits associated with the integration of multiproduct firms through mergers/ acquisitions. We utilize a system-optimization perspective for the model development and provide the variational inequality formulations, which are then utilized to propose a computational procedure which fully exploits the underlying network structure. We illustrate the theoretical and computational framework with numerical examples.This paper is a contribution to the literatures of supply chain integration and mergers and acquisitions.

[1]  Anna Nagurney,et al.  A supply chain network equilibrium model with random demands , 2004, Eur. J. Oper. Res..

[2]  S. Dafermos.  The Traffic Assignment Problem for Multiclass-User Transportation Networks , 1972 .

[3]  A. Nagurney.  Network Economics: A Variational Inequality Approach , 1992 .

[4]  Anna Nagurney,et al.  A System-Optimization Perspective for Supply Chain Network Integration: The Horizontal Merger Case , 2008 .

[5]  T. C. Wilson,et al.  Are you paying too much for that acquisition? , 1999, Harvard business review.

[6]  Hokey Min,et al.  Supply chain modeling: past, present and future , 2002 .

[7]  Peter K. Schott,et al.  Multi-Product Firms and Product Switching , 2006 .

[8]  Multi-Product Firms and Product Switching , 2008 .

[9]  G. M. Korpelevich.  The extragradient method for finding saddle points and other problems , 1976 .

[10]  A. Nagurney.  Computational comparisons of algorithms for general asymmetric traffic equilibrium problems with fixed and elastic demands , 1986 .

[11]  Anna Nagurney,et al.  On the relationship between supply chain and transportation network equilibria: A supernetwork equivalence with computations , 2006 .

[12]  Shenghan Xu,et al.  Supply chain synergy in mergers and acquisitions: Strategies, models and key factors , 2007 .

[13]  Hector A. Rosales-Macedo.  Nonlinear Programming: Theory and Algorithms (2nd Edition) , 1993 .

[14]  James R. Langabeer,et al.  SUPPLY CHAIN INTEGRATION: THE KEY TO MERGER SUCCESS. , 2003 .

[15]  Anna Nagurney,et al.  Preface to "On a Paradox of Traffic Planning" , 2005, Transp. Sci..

[16]  Katta G. Murty,et al.  Nonlinear Programming Theory and Algorithms , 2007, Technometrics.

[17]  T. C. Edwin Cheng,et al.  A Multiproduct, Multicriterion Supply-Demand Network Equilibrium Model , 2006, Oper. Res..

[18]  Anna Nagurney,et al.  Comparative tests of multimodal traffic equilibrium methods , 1984 .

[19]  Stella C. Dafermos,et al.  Traffic assignment problem for a general network , 1969 .

[20]  T. Koopmans,et al.  Studies in the Economics of Transportation. , 1956 .

[21]  Metin Türkay,et al.  Synergy analysis of collaborative supply chain management in energy systems using multi-period MILP , 2006, Eur. J. Oper. Res..

[22]  John N. Tsitsiklis,et al.  Parallel and distributed computation , 1989 .

[23]  Anna Nagurney,et al.  On a Paradox of Traffic Planning , 2005, Transp. Sci..

[24]  Douglas D. Davis,et al.  Equilibrium Price Dispersion, Mergers and Synergies: An Experimental Investigation of Differentiated Product Competition , 2006 .

[25]  Dietrich Braess,et al.  Über ein Paradoxon aus der Verkehrsplanung , 1968, Unternehmensforschung.

[26]  A. Nagurney.  Supply Chain Network Economics: Dynamics of Prices, Flows and Profits , 2006 .

[27]  Philip Chang,et al.  A measure of the synergy in mergers under a competitive market for corporate control , 1988 .