Supply chain contracts for quality investment incentives

Fang Xu, Jian Li*, Fengmei Yang

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

This paper investigates contracts for quality investment incentives in a supply chain consisting of an original equipment manufacturer (OEM) and a contractmanufacturer (CM) with price- and quality-sensitive demand. The OEM outsources the production to the CM who invests to guarantee quality, while the OEM is responsible for product sales and product pricing. We analyze their individual optimal strategies under three types of contract, i.e., a wholesale price contract, a revenue sharing contract, and a cost sharing contract. We also explore the best contract from the perspective of the whole supply chain performance.

Original languageEnglish
Title of host publicationProceedings of the 2012 5th International Joint Conference on Computational Sciences and Optimization, CSO 2012
Pages733-736
Number of pages4
DOIs
Publication statusPublished - 2012
Externally publishedYes
Event2012 5th International Joint Conference on Computational Sciences and Optimization, CSO 2012 - Harbin, Heilongjiang, China
Duration: 23 Jun 201226 Jun 2012

Publication series

NameProceedings of the 2012 5th International Joint Conference on Computational Sciences and Optimization, CSO 2012

Conference

Conference2012 5th International Joint Conference on Computational Sciences and Optimization, CSO 2012
Country/TerritoryChina
CityHarbin, Heilongjiang
Period23/06/1226/06/12

Keywords

  • Cost sharing contract
  • Quality investment
  • Revenue sharing contract
  • Wholesale price contract

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