Contract analysis: A performance measures and profit evaluation within two-echelon supply chains

Kannan Govindan, Ali Diabat, Maria Nicoleta Popiuc

Research output: Contribution to journalArticle

Abstract

Coordination is regarded as key in managing dependencies between distinctive members of a supply chain through the benefits of coordination mechanisms. Such coordination mechanisms are contracts, implemented to increase total supply chain profit, reduce costs and share risk among supply chain members. However, by contract implementation the retailer is constrained in his purchase by bearing the entire risk of holding the inventory (wholesale price contract) or by limited risk allocated to the supplier (buyback, revenue sharing and quantity flexibility contracts). By implementing an advanced purchase system the risk of inventory is fairly divided between the supplier and the retailer. In order to observe inventory implications on the supply chain bottom line, this article is directed towards the evaluation of performance measures and supply chain profit behavior under buyback, revenue sharing, quantity flexibility and advanced purchase discount contracts versus no coordination and wholesale price systems.

Original languageEnglish (US)
Pages (from-to)58-74
Number of pages17
JournalComputers and Industrial Engineering
Volume63
Issue number1
DOIs
StatePublished - Aug 2012

Keywords

  • Contract
  • Supply chain coordination
  • To-level supply chain

ASJC Scopus subject areas

  • Computer Science(all)
  • Engineering(all)

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