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Supply Chain Coordination based on Effort and Service Level with False Failure Returns

In: Liss 2014

Author

Listed:
  • Meng Su

    (Beijing Jiaotong University)

  • Hongjie Lan

    (Beijing Jiaotong University
    Lab of Logistics management and Technology)

Abstract

This paper studies supply chain contracts strategy under service level constraint with one manufacturer and one retailer when demand is uncertain and dependent on effort and price. False failure returns model is built under decentralized supply chain. To solve the problem of double marginalization, two contracts, including the traditional buy-back contract and the contract based on rebate and penalty are designed to coordinate the supply chain. As the results have shown, the contract based on rebate and penalty could better coordinate the supply chain. Retailer’s effort is encouraged by rebate and penalty and whether to improve the service level to gain a larger profit should be further concerned with cost and benefit.

Suggested Citation

  • Meng Su & Hongjie Lan, 2015. "Supply Chain Coordination based on Effort and Service Level with False Failure Returns," Springer Books, in: Zhenji Zhang & Zuojun Max Shen & Juliang Zhang & Runtong Zhang (ed.), Liss 2014, edition 127, pages 1325-1330, Springer.
    • Handle: RePEc:spr:sprchp:978-3-662-43871-8_192
    DOI: 10.1007/978-3-662-43871-8_192
    as

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