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

Long-term vs. Short-term Contracts; A European perspective on natural gas

This paper analyses the economics of long-term gas contracts under changing institutional conditions, mainly gas sector liberalisation. The paper is motivated by the increasingly tense debate in continental Europe, UK and the US on the security of long-term gas supply. We discuss the main issues regarding long-term contracts, i.e. the changing role of the flexibility clause, the effect of abandoning the destination clause, and the strategic behaviour of producers between long-term sales and spot-sales. The literature suggests consumers and producers benefit from risk hedging through long-term contracts. Furthermore long-term contracts may reduce exercise of market power. This was argued to benefit consumers at the ‘expense’ of producers’ profits. Our analysis shows if the long-run demand elasticity is significantly lower than the short-run elasticity, both strategic producers and consumers benefit from lower prices and larger market volume. Some policy implications of the findings are also discussed

Trust, Contracting, and Adaptation in Agri‐Food Hybrid Structures

The paper considers the relationship between trust and governance structure from a Transaction Cost Economics perspective. The role of trust in the coordinating decisions is variously conceptualized according to the theoretical view adopted by the scholars. The present study adopt the three‐level schema introduced by Williamson (1996) and suggest that determinants of trust may operate both at institutional and governance structure level. The analytical framework depicted maintains that trust may determine a reduction of ex post transaction cost in the adaptation of hybrid structure. As a consequence trust appears to be able to extend the range of existence of the hybrids. The empirical part of the study is dedicated to a case study which illustrates the emerging of conditional trust (Fritz et al., 2008) and the role of trust in the adaptation process.hybrid, conditional trust, adaptation, contractual relationship., Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Industrial Organization, Research Methods/ Statistical Methods,

European Market Integration for Gas? Volume Flexibility and Political Risk

Gas exports to the Continent are regulated by long term take-or-pay contracts. The contracts are described and analyzed. We thereafter examine whether the most central European gas market, the German market, is integrated. Are there substantial price differences between gas from different export countries, and do prices move together? Time series of Norwegian, Dutch and Russian gas export prices to Germany in 1990-1998 are examined. Cointegration tests show that the different border prices for gas to Germany move proportionally over time, indicating an integrated gas market (the Law of One Price holds). We find differences in mean prices, with Russian gas being sold at prices systematically lower than Dutch and Norwegian gas. Among the explanatory factors for price discrepancies are differences in volume flexibility (swing) and perceived political risk.Market integration, gas markets, cointegration test

A coordination framework for distributed supply chains

Supply chain is a network of cooperating organizations that are involved through upstream and downstream linkages. Such a complex system cannot be modeled simply by mathematical equations without simplification of the problem. Recently, Multi-Agent System (MAS) is proposed as a modeling technique to represent supply chain networks. In fact, many application problems in MASs that are concerned with finding a consistent combination of agent actions can be formalized as Distributed Constraints Satisfaction Problem (DCSP). The main purpose of this paper is to propose a novel coordination framework by adopting the DCSP philosophy for distributed supply chains, which are modeled by MASs, subjected to uncertainties. Simulation results indicate that the proposed mechanism outperforms traditional stochastic modeling in solving supply chain dynamics in terms of total cost and fill rate of the system. © 2004 IEEE.published_or_final_versio

Structuring postponement strategies in the supply chain by analytical modeling

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Trust and Contracting in Agri-Food Hybrid Structures

The paper aims at examining the hypothesis that the influence of trust on contract can be thought of as a dynamic factor of organizational choices in supply chains. The relationship between contract and trust is delineated on the basis of institutional environment, contractual incompleteness, safeguards and restrictive provisions. The interaction between individual and system elements in the formation of trust and its influence in hybrid contracting is considered. According to a New Institutional Economics approach and a theoretical framework is proposed. Empirical evidence is provided by a case study regarding an Italian retailer company establishing hybrid structure with its suppliers. Investments in suppliers selection provide the basis for trust supporting relationships which economize on negotiating and litigation costs.hybrid structures, trust, contract, Agribusiness, Q13, D23,