Hybrid contracting within multi-location networks

The expansion of hybrid organisations during the past 30 years makes the analysis of planning in these organisations indispensable. Hybrid organisations are often applied in food industries or at retailers, which deal with seasonal or perishable goods. Despite the large amount of papers discussing hybrid organisations, a newsvendor approach which fits hybrid organisations has not yet been published. The application of centralised or decentralised approaches in these organisations causes problems, such as conflicts between global standards and local goals, high effort of data management or low result quality. Therefore, the aim of this paper is to develop a mathematical approach to determine production quantities in multi-location supply chains with respect to the privacy of local information. The findings of the paper prove that the suggested hybrid multi-location contracting process leads to optimal results, even if local cost information is not public and even if the decentralised sites act mainly independently. (C) 2012 Elsevier B.V. All rights reserved.