Search results for "Setup cost"
showing 2 items of 2 documents
Cooperative Inventory control
2005
In multi-retailer inventory control the possibility of sharing setup costs motivates communication and coordination among the retailers. We solve the problem of finding suboptimal distributed reordering policies that minimize setup, ordering, storage, and shortage costs incurred by the retailers over a finite horizon. Neuro-dynamic programming (NDP) reduces the computational complexity of the solution algorithm from exponential to polynomial on the number of retailers.
Stackelberg equilibrium with multiple firms and setup costs
2017
Abstract I provide conditions that guarantee that a Stackelberg game with a setup cost and an integer number of identical leaders and followers has an equilibrium in pure strategies. The main feature of the game is that when the marginal follower leaves the market the price jumps up, so that a leader’s payoff is neither continuous nor quasiconcave. To show existence I check that a leader’s value function satisfies the following single crossing condition: When the other leaders produce more the leader never accommodates entry of more followers. If demand is strictly logconcave, and if marginal costs are both non decreasing and not flatter than average costs, then a Stackelberg equilibrium ex…