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Contracting for Quality in a Multiple-Level Global Supply Chain

Author

Listed:
  • Yang Dong
  • Kefeng Xu

    (UTSA)

  • Sining Song

Abstract

Today’s global supply chains are inundated with examples where products and components are sourced from manufacturers and suppliers around the world, making quality assurance of the finished products increasingly complex but critical. In this paper, we propose a supply chain framework of a sequential quality management process where the finished product quality depends on the manufacturer quality, which is also affected by component quality. We establish and examine various types of quality incentive mechanisms with implications on efficiency and effectiveness of supply chain quality management. The impact of supply chain structures on supply chain performances in product quality and profitability is closely examined.

Suggested Citation

  • Yang Dong & Kefeng Xu & Sining Song, 2014. "Contracting for Quality in a Multiple-Level Global Supply Chain," Working Papers 0205mss, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0205mss
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    File URL: http://interim.business.utsa.edu/wps/mss/200MSS-068-2010.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Incentive mechanism design; supply chain quality; quality assurance; multi-tier supply chain.;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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