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The Delivery and Control of Quality in Supplier-Producer Contracts

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Author Info

  • Diane J. Reyniers

    (London School of Economics, London WC2A 2AP, United Kingdom)

  • Charles S. Tapiero

    (ESSEC, 95021 Cergy Pontoise, France)

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    Abstract

    We model the effect of contract parameters such as price rebates and after-sales warranty costs on the choice of quality by a supplier, the inspection policy of a producer, and the resulting end product quality. Both noncooperative and cooperative settings are explored. The paper's contribution is to highlight the importance of strategic and contractual issues in quality management.

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    File URL: http://dx.doi.org/10.1287/mnsc.41.10.1581
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 41 (1995)
    Issue (Month): 10 (October)
    Pages: 1581-1589

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    Handle: RePEc:inm:ormnsc:v:41:y:1995:i:10:p:1581-1589

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    Related research

    Keywords: quality control; inspection; game theory;

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    Cited by:
    1. Lauren Xiaoyuan Lu & Jan A. Van Mieghem & R. Canan Savaskan, 2006. "Incentives for Quality through Endogenous Routing," Discussion Papers 1436, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Kim, Bowon, 2000. "Coordinating an innovation in supply chain management," European Journal of Operational Research, Elsevier, vol. 123(3), pages 568-584, June.
    3. Dionisia Tzavara and Adrienne Héritier, 2011. "Quality and Environmental Regulation: Verifying Compliance along the Supply Chain," EUI-RSCAS Working Papers 16, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    4. Xie, Gang & Yue, Wuyi & Wang, Shouyang & Lai, Kin Keung, 2011. "Quality investment and price decision in a risk-averse supply chain," European Journal of Operational Research, Elsevier, vol. 214(2), pages 403-410, October.
    5. Iida, Tetsuo, 2012. "Coordination of cooperative cost-reduction efforts in a supply chain partnership," European Journal of Operational Research, Elsevier, vol. 222(2), pages 180-190.
    6. Aust, Gerhard & Bräuer, Ina & Buscher, Udo, 2014. "A note on “Quality investment and inspection policy in a supplier-manufacturer supply chain”," European Journal of Operational Research, Elsevier, vol. 234(3), pages 910-915.
    7. Reyniers, Diane J. & Tapiero, Charles S., 1995. "Contract design and the control of quality in a conflictual environment," European Journal of Operational Research, Elsevier, vol. 82(2), pages 373-382, April.
    8. Gurnani, Haresh & Gerchak, Yigal, 2007. "Coordination in decentralized assembly systems with uncertain component yields," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1559-1576, February.
    9. Lee, Chang Hwan & Rhee, Byong-Duk & Cheng, T.C.E., 2013. "Quality uncertainty and quality-compensation contract for supply chain coordination," European Journal of Operational Research, Elsevier, vol. 228(3), pages 582-591.
    10. Tapiero, Charles, 2003. "Risk Management: An Interdisciplinary Framework," ESSEC Working Papers DR 03014, ESSEC Research Center, ESSEC Business School.
    11. Xie, Gang & Wang, Shouyang & Lai, K.K., 2011. "Quality improvement in competing supply chains," International Journal of Production Economics, Elsevier, vol. 134(1), pages 262-270, November.
    12. Dionisia Tzavara & Adrienne Héritier, 2011. "Quality and Environmental Regulation: Verifying Compliance along the Supply Chain," RSCAS Working Papers 2011/16, European University Institute.

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