Implementation of optimal schedules in outsourcing with identical suppliers

• Authors: Flip Klijn.
• Mathematical Methods of Operations Research

This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to a socially optimal schedule. For the case of single demand the shortest-first mechanism implements optimal schedules in Nash equilibrium. We show that for the general case there exists no anonymous mechanism that implements optimal schedules in correlated equilibrium.