Collaboration Strategies for Private COVID-19 Vaccine Supply Chain Under Demand Uncertainty: An Indian Perspective

Abstract

In 2020, the COVD-19 pandemic emerged as the most severe crisis of the century. Several vaccine manufacturing firms have taken the necessary initiatives to combat this problem. However, profitability issues can bring down these firms’ vaccine manufacturing efforts, thus leading to lower vaccination coverage. Motivated by this issue, we depict a private COVID-19 vaccine supply chain with a supply chain framework comprising of one vaccine manufacturer and multiple private hospitals under demand uncertainty. We incorporate a Stackelberg game-theoretic approach to demonstrate the collaboration between the vaccine manufacturer and the private hospital using wholesale price, two-part tariff and revenue sharing contracts. We determine the optimal number of vaccines and coordination criteria for each contract. Using a real-life approximation of Indian data, we conduct several numerical studies and facilitate the visual depiction of all the theoretical insights obtained from the model. We also discuss the managerial implications of this study. As per our analysis, when private hospitals procure a higher number of vaccines from the vaccine manufacturer, the two-part tariff contract-based collaboration mechanism yields a win-win situation for both the private hospitals and the vaccine manufacturer and is better than the wholesale price contract.