Supply Chain Coordination in Case of Asymmetric Information PDF Download
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Author: Guido Vogt
Publisher: Springer Science & Business Media
ISBN: 3642201326
Category : Business & Economics
Languages : en
Pages : 208
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Book Description
Information sharing is frequently promoted as a mean to improve the supply chain performance. This work shows the results of behavioral experiments, in which the participants share private information in order to influence the contract terms in a Just-in-Time environment. It is shown that the impact of information sharing is ambiguous, and dependent on several factors, such as contract flexibility and complexity or the interacting behavioral types. The experimental results form the basis for a behavioral principal-agent model that gives valuable insights on how the interaction of trust, trustworthiness and the information sharing strategy impacts the supply chain performance.
Author: Guido Vogt
Publisher: Springer Science & Business Media
ISBN: 3642201326
Category : Business & Economics
Languages : en
Pages : 208
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Book Description
Information sharing is frequently promoted as a mean to improve the supply chain performance. This work shows the results of behavioral experiments, in which the participants share private information in order to influence the contract terms in a Just-in-Time environment. It is shown that the impact of information sharing is ambiguous, and dependent on several factors, such as contract flexibility and complexity or the interacting behavioral types. The experimental results form the basis for a behavioral principal-agent model that gives valuable insights on how the interaction of trust, trustworthiness and the information sharing strategy impacts the supply chain performance.
Author: Özalp Özer
Publisher:
ISBN:
Category :
Languages : en
Pages : 24
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Book Description
We study a supply chain with two suppliers competing over a contract to supply components to a manufacturer. One of the suppliers is a big company for whom the manufacturer's business constitutes a small part of his business. The other supplier is a small company for whom the manufacturer's business constitutes a large portion of his business. We analyze the problem from the perspective of the big supplier and address the following questions: What is the optimal contracting strategy that the big supplier should follow? How does the information about the small supplier's production cost affect the profits and contracting decision? How does the existence of the small supplier affect profits? By studying various information scenarios regarding the small supplier's and the manufacturer's production cost, we show, for example, that the big supplier benefits when the small supplier keeps its production cost private. We quantify the value of information for the big supplier and the manufacturer. We also quantify the cost (value) of the alternative-sourcing option for the big supplier (the manufacturer). We determine when an alternative-sourcing option has more impact on profits than information. We conclude with extensions and numerical examples to shed light on how system parameters affect this supply chain.
Author: Guido Vogt
Publisher: Springer
ISBN: 9783642201318
Category : Business & Economics
Languages : en
Pages : 181
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Book Description
Information sharing is frequently promoted as a mean to improve the supply chain performance. This work shows the results of behavioral experiments, in which the participants share private information in order to influence the contract terms in a Just-in-Time environment. It is shown that the impact of information sharing is ambiguous, and dependent on several factors, such as contract flexibility and complexity or the interacting behavioral types. The experimental results form the basis for a behavioral principal-agent model that gives valuable insights on how the interaction of trust, trustworthiness and the information sharing strategy impacts the supply chain performance.
Author: Lennart Christian Johnsen
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Zahra Mirzajani
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In this study, we analyze the challenges faced by manufacturers in promoting sustainability throughout their supply chains when the supplier is capital-constrained, has private access to production cost information, and must choose between regular and sustainable production. We develop a dyadic supply chain model to determine the optimal advanced payment contract under asymmetric information. Our comparative results reveal that the optimal contract requires manufacturers to balance promoting sustainability, pricing information rent, and avoiding channel efficiency losses. The key factors in achieving this balance are (i) production cost efficiency, and (ii) the marginal cost of switching from regular to sustainable production. When the efficient supplier is more sustainably efficient, then the mere existence of information asymmetry always leads to a less sustainable supply chain. However, if the efficient supplier is less sustainably efficient, the manufacturer may be better off encouraging the inefficient supplier to use sustainable operations where regular operations were used under full information. This reveals the bright side of information asymmetry regarding supplier sustainability risk. Although information asymmetry typically leads to channel loss, our study shows that it could result in a greener supply chain, albeit with lower profits for the parties involved. Our results also challenge the common belief that more private production cost information always benefits suppliers. As the degree of information asymmetry increases, the manufacturer may adopt the second-best solution to prevent rent inflation, which could lead to reduced rent payment. This indicates that the supplier's information advantage may not always translate into higher pay and could backfire.
Author: Wenqiang Xiao
Publisher:
ISBN:
Category :
Languages : en
Pages : 33
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Book Description
We consider a make-to-order supply chain where a retailer sells a product for a manufacturer. There is a single selling season, during which the retailer receives customer orders and then sends the orders to the manufacturer for fulfillment. The manufacturer privately exerts effort to install production capacity prior to the season. Further, the manufacturer has superior information about the product potential than the retailer. Our focus is on the retailer's optimal design of incentive contracts facing the combination of adverse selection (due to the manufacturer's superior information about the demand) and moral hazard (due to the manufacturer's private effort decision). A contract is efficient if it renders the retailer the first-best profit (i.e., the integrated system's maximum profit). It is often true that the first-best profit can not be achieved even in settings with pure adverse selection. Indeed, we show that contracting based on sales is inefficient and illustrate the causes of inefficiency by studying a menu of revenue sharing contracts. However, we propose two simple mechanisms and show both are efficient: in the first, contracting is based on demand; in the second, contracting is based on the conjunction of sales and the binary information of whether or not demand exceeds the capacity. The insight obtained from these two mechanisms could offer useful guidelines for efficient contract design in more general principal-agent settings with both adverse selection and moral hazard.
Author: Guido Voigt
Publisher:
ISBN:
Category :
Languages : en
Pages : 33
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Book Description
Author: Sudhi Seshadri
Publisher: Springer Science & Business Media
ISBN: 9780387251820
Category : Business & Economics
Languages : en
Pages : 346
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Book Description
Sourcing Strategy is about sourcing as a long term strategic activity. Myopic purchasing management stops short with describing functional procedures and procedural innovations such as online order processing. The goal of this book is not merely to document sourcing strategy, but to provide the tools to determine it. Therefore, rather than merely describe common sourcing processes, the book takes a normative approach to sourcing strategy. It argues for a rational, complete and integrated process view. It supports its recommendations with logical arguments from an interdisciplinary and analytical approach grounded in microeconomics, law and business strategy. Part 1 of the book explains the economic and business principles that underlie sourcing strategies. It derives policies that guide viable strategies to meet sourcing goals. Part 2 applies these to creative designs for standard sourcing scenarios.
Author: Zhibin (Ben) Yang
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Book Description
We study a manufacturer that faces a supplier privileged with private information about supply disruptions. We investigate how risk-management strategies of the manufacturer change, and examine whether risk-management tools are more, or less, valuable, in the presence of such asymmetric information. We model a supply chain with one manufacturer and one supplier, in which the supplier's reliability is either high or low and is the supplier's private information. Upon disruption the supplier chooses between paying a penalty to the manufacturer for the shortfall and using backup production to fill the manufacturer's order. Using mechanism design theory, we derive the optimal contract menu offered by the manufacturer. We find that information asymmetry may cause the less reliable supplier type to stop using backup production while the more reliable supplier type continues to use it. Additionally, the manufacturer may stop ordering from the less reliable supplier type altogether. The value of backup production for the manufacturer is not necessarily larger under symmetric information and, for the more reliable supplier type, it could be negative . The manufacturer is willing to pay the most for information when backup production is moderately expensive. The value of information may increase as supplier types become uniformly more reliable. Thus, higher reliability need not be a substitute for better information.
Author: Panos Kouvelis
Publisher: John Wiley & Sons
ISBN: 1118115791
Category : Business & Economics
Languages : en
Pages : 497
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Book Description
A comprehensive, one-stop reference for cutting-edge research in integrated risk management, modern applications, and best practices In the field of business, the ever-growing dependency on global supply chains has created new challenges that traditional risk management must be equipped to handle. Handbook of Integrated Risk Management in Global Supply Chains uses a multi-disciplinary approach to present an effective way to manage complex, diverse, and interconnected global supply chain risks. Contributions from leading academics and researchers provide an action-based framework that captures real issues, implementation challenges, and concepts emerging from industry studies.The handbook is divided into five parts: Foundations and Overview introduces risk management and discusses the impact of supply chain disruptions on corporate performance Integrated Risk Management: Operations and Finance Interface explores the joint use of operational and financial hedging of commodity price uncertainties Supply Chain Finance discusses financing alternatives and the role of financial services in procurement contracts; inventory management and capital structure; and bank financing of inventories Operational Risk Management Strategies outlines supply risks and challenges in decentralized supply chains, such as competition and misalignment of incentives between buyers and suppliers Industrial Applications presents examples and case studies that showcase the discussed methodologies Each topic's presentation includes an introduction, key theories, formulas, and applications. Discussions conclude with a summary of the main concepts, a real-world example, and professional insights into common challenges and best practices. Handbook of Integrated Risk Management in Global Supply Chains is an essential reference for academics and practitioners in the areas of supply chain management, global logistics, management science, and industrial engineering who gather, analyze, and draw results from data. The handbook is also a suitable supplement for operations research, risk management, and financial engineering courses at the upper-undergraduate and graduate levels.
