Overview and classification of coordination contracts within forward and reverse supply chains

Among coordination mechanisms, contracts are valuable tools used in both theory and practice to coordinate various supply chains. The focus of this paper is to present an overview of contracts and a classification of coordination contracts and contracting literature in the form of classification schemes. The two criteria used for contract classification, as resulted from contracting literature, are transfer payment contractual incentives and inventory risk sharing. The overview classification of the existing literature has as criteria the level of detail used in designing the coordination models with applicability on the forward and reverse supply chains.Coordination contracts; forward supply chain; reverse supply chain

A distributed coordination mechanism for supply networks with asymmetric information

The paper analyses the problem of coordination in supply networks of multiple retailers and a single supplier, where partners have asymmetric, private information of demand and costs. After stating generic requirements like distributedness, truthfulness, efficiency and budget balance, we use the apparatus of mechanism design to devise a coordination mechanism that guarantees the above properties in the network. The resulting protocol is a novel realisation of the widely used Vendor Managed Inventory (VMI) where the responsibility of planning is at the supplier. We prove that together with the required generic properties a fair sharing of risks and benefits cannot be guaranteed. We illustrate the general mechanism with a detailed discussion of a specialised version, assuming that inventory planning is done according to the newsvendor model, and explore the operation of this protocol through computational experiments

Capacity reservation and wholesale price contracts under forecast sharing: a behavioral assessment

We study a supply chain setup in which a buyer has private end customer demand information that she can share with the supplier. The demand information is relevant to the supplier's capacity decision. We address the question of whether the supplier benefits from installing nonlinear capacity reservation contracts rather than wholesale price contracts. We contribute to the literature by providing the first internally valid comparison of both contracts with human decision makers. We setup an experimental study with four treatments (both contracts as well as different supplier margins). From a supplier's perspective, we observe that the capacity reservation contract significantly outperforms the wholesale price contract; however, the supplier's benefit from using capacity reservation is much higher under low margins than under high margins. Regarding supply chain performance, the positive effect for the supplier exceeds the negative effect for the buyer in the low margin setting, while the two effects neutralize each other in the high margin setting. We identify behavioral factors explaining deviations from the theoretical predictions. In particular, we observe naïve anchoring and trust as strong behavioral drivers common to both contract types. Even though the complexity of the nonlinear contract results in weaker performance than that predicted by theory, our study reveals that suppliers can still benefit from installing them; thus, providing important managerial implications for the choice of the contract type

Designing cooperation mechanisms for supply chains

The paper defines generic requirements towards cooperative planning in the nucleus of any supply network that is constituted by a pair of autonomous manufacturer and supplier who possess asymmetric information on demand forecast and costs, respectively. Then a novel way is suggested for investigating this problem by means of the apparatus of mechanism design. The analysis results in some provable generic properties as for efficiency and truthfulness, and shows the impossibility of fair cost and profit sharing. Further on, design principles towards a payment scheme are devised that provide incentive for the partners to cooperate in order to minimize costs. This payment can be considered the price for a flexible supply service. As examples, the generic framework is instantiated with two particular cooperative supply mechanisms

The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

Trust and Information Sharing in Supply Chains

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/91120/1/poms1284.pd

Tourism supply chain management : a new research agenda

2008-2009 > Academic research: refereed > Publication in refereed journalAccepted ManuscriptPublishe

Credible Information Sharing in Supply Chains - A Behavioral Assessment of Review Strategies

In laboratory experiments, we compare the ability of trigger strategies with that of (relatively complex) review strategies to coordinate capacity decisions in supply chains when demand forecasts are based on private information. While trigger strategies punish apparently uncooperative behavior (misstated demand forecasts) immediately, review strategies only punish when apparently misstated information culminates over several periods. We contribute to the existing literature on capacity coordination in supply chains by showing that repeated game strategies lead to a significant degree of forecast misrepresentation, although they theoretically support the truth-telling equilibrium. However, forecast misrepresentation is more pronounced in review strategies. This behavioral effect is diametrically opposed to the theoretically predicted benefit of review strategies

The bullwhip effect: Progress, trends and directions

This is the final version. Available on open access from Elsevier via the DOI in this recordThe bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain. This paper provides a review of the bullwhip literature which adopts empirical, experimental and analytical methodologies. Early econometric evidence of bullwhip is highlighted. Findings from empirical and experimental research are compared with analytical and simulation results. Assumptions and approximations for modelling the bullwhip effect in terms of demand, forecast, delay, replenishment policy, and coordination strategy are considered. We identify recent research trends and future research directions concerned with supply chain structure, product type, price, competition and sustainability