Title: Retailer-supplier matching: an application of the deferred acceptance algorithm

Authors: Taewoo Jung, Changhyun Kwon

Addresses: Department of Economics, University at Buffalo, SUNY, Buffalo, NY 14260, USA. ' Department of Industrial and Systems Engineering, University at Buffalo, SUNY, Buffalo, NY 14260, USA

Abstract: In this paper, we apply matching theory to supply chain coordination. We present mathematical optimisation models similar to the newsvendor problem to provide appropriate conditions for retailer-supplier matching. In particular, our matching algorithm, compared to the general matching theory, has uniquely been affected by contract sizes and ordering sequences. We also study that our matching application guarantees stable and optimal outcomes. Numerical examples with various parameter settings are provided to test the feasibility of the matching algorithms. We find that we can avoid the worst matching case when we use the proposed matching algorithms.

Keywords: deferred acceptance algorithms; SCM; supply chain management; retailers; retail trade; suppliers; supply chain coordination; mathematical optimisation; optimisation models; newsvendor problem; matching algorithms; contract sizes; ordering sequences; matching applications; stable outcomes; optimal outcomes; services operations; informatics.

DOI: 10.1504/IJSOI.2011.041420

International Journal of Services Operations and Informatics, 2011 Vol.6 No.3, pp.248 - 258

Available online: 22 Jul 2011 *

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