J.E. Mullat

Equilibrium in a Distribution Network with Transaction Costs, in Russian (pdf); in English (pdf)

Abstract.

In a real-world scenario, we consider a regional retail chain compris-ing suppliers, agents, and distributors operating in the grocery industry. Due to various factors such as fuel price hikes and regulatory changes, transaction costs within the chain begin to rise. As a consequence, the coordination of or-ders and deliveries among the chain's entities becomes crucial to maintain cost efficiency. Amidst these challenges, the retail chain adapts by forming tighter collaborations and optimizing its logistics network to minimize the impact of increasing transaction costs. For instance, suppliers might consolidate deliver-ies to reduce transportation expenses, while distributors streamline their inven-tory management systems to avoid stock-outs and excess inventory costs. De-spite the evolving landscape, the key players within the chain strive to uphold a balance where the profitability of each transaction outweighs the associated costs, fostering a resilient ecosystem. This dynamic mirrors the concept of a monotonous game, wherein participants abide by established rules and strate-gies to navigate the changing market conditions while ensuring their individual and collective sustainability. Moreover, the formal scheme of coalition forma-tion described in the context of this retail chain sheds light on how strategic alliances can enhance resilience, with certain coalitions possessing inherent advantages that bolster their ability to withstand market volatility. Keywords: suppliers; distributors; monotonic game; retail chain; coalition.