Report Title: Design of contracts for collaborative supply chains
Reporter(Institution): Feng Xuehao(University of Seoul’s Department of Industrial Engineering)
Time: 2:00.pm,27th December, 2013
Location: B-201, Building of Economics & Management, Jiulonghu Campus
Brief introduction of Reporter: This presentation is about supply chain coordination under supply chain contracts with two realistic considerations. The first issue is supply chain coordination under budget constraints when the financial market is unavailable. A revenue-sharing-and-buyback (RSB) contract that combines a revenue-sharing (RS) contract and a buyback (BB) contract is proposed. It is shown that the RS and BB contracts are not feasible under certain budget scenarios, whereas the RSB contract can always coordinate the supply chain and arbitrarily allocate the profit. The analytical and numerical results provide insight into how managers select an appropriate contract based on their budget scenario and capital costs. The second issue is about revenue-sharing with reliability (RSR) contracts in the multi-stage supply chain. The RSR contract can coordinate supply chains and arbitrarily allocate total profits. A two-round profit allocation mechanism is utilized in this RSR contract. A flexible method for adjusting the profits in the second round is proposed. The incentives for the members to improve their reliability under the RS and RSR contracts by considering two realistic types of improvement investments in reliability is presented. It is found that, in some cases, the RS contracts are limited in terms of encouraging the members to improve their reliability. The presentation shows that there are greater incentives for members to improve their reliability under an RSR contract. The analytical and numerical results yield insights into how managers can be encouraged to improve their reliability by setting certain decision variables..
