Capacity outsourcing investment and pricing decision in ATO supply chain with the second resource

Affected by global economic crisis, the market demand is reducing severely, most production capacity of private enterprises is in idle. What the firm facing with is going bankrupt, it´s real time for the private enterprises to dig out how to decide the capacity and how to find the new economic growth way out. This paper focuses on assemble-to-order supply chain, with the view of capacity outsourcing business model, aiming to take a deep exploration into the critical factor that impact the decision of capacity investment and pricing. For solving the problem of supplier-drive supply chain, this paper analyzes the game theory between two suppliers and one assembler, and then formulates the target model, using backwards induction and numerical method to search for the equilibrium solution. The result proposes solutions for the members of the supply chain on capacity outsourcing decision and pricing, and also contributes to the performance of the system with a uncertain environment.