Recent applications of game-theoretic analysis to supply chain efficiency have focused on constructs between a buyer (the retailer or manufacturer) and a seller (the supplier) in successive stages of a supply chain. If demand for the final product is stochastic then the supplier has an incentive to keep its capacity relatively low to avoid creating unneeded capacity. The manufacturer, on the ot...

A reverse supply chain, as a post-consumption activity, aims at extracting value from products at end of their life cycle (Mafakher and Nasiri, Journal of Cleaner Production 59: 185–196, 2013). As well, company’s awareness is attracting increasing attention toward sustainable business practices. Open-innovation is a typical example of coordinative activity that a manufacturer should share a pro...

Budget constraints are commonly considered in real decision frameworks; however, the literature has rarely addressed the design of contracts for supply chains with budget-constrained members and in which capital costs are considered. In this article, we study supply chain coordination of budget-constrained members when a financial market is unavailable. We propose a revenue-sharing-and-buy-back...

It is common for a retailer to sell products from competing manufacturers. How then should the …rms manage their contract negotiations? The supply chain coordination literature focuses either on a single manufacturer selling to a single retailer or one manufacturer selling to many (possibly competing) retailers. We …nd that some key conclusions from those market structures do not apply in our s...

Supply chains are composed of distributed, heterogeneous and autonomous elements, whose relationships are dynamic. Agricultural supply chains, in particular, have a number of distinguishing features e.g., they are characterized by strict regulations to ensure safety of food products, and by the need for multi-level traceability. Contracts in such chains need sophisticated specification and mana...

I this paper, we quantify the efficiency of decentralized supply chains that use price-only contracts. With a price-only contract, a buyer and a seller agree only on a constant transaction price, without specifying the amount that will be transferred. It is well known that these contracts do not provide incentives to the parties to coordinate their inventory/capacity decisions. We measure effic...

We analyze the effort and pricing decisions in a two facility supply chain in which one of the parties can exert costly effort to increase demand. We consider an outsourcing model in which the supplier makes the effort decision and an in-house production model in which the manufacturer decides on the effort level and we compare these two models with each other. We analyze and compare several co...

Revenue-sharing contracts are a kind of mechanism aimed at improving performance and achieving precise coordination of the supply chain. In this paper, we analyse and develop the revenue-sharing contract model of the three-level supply chain with distributor’s sales effort dependent demand. The paper discusses the impacts of sales efforts on coordination of the supply chain and explains the rea...

There are many materials for which the quantity needed by a firm is at best indirectly related to the quantity of final product produced by that firm, such as solvents in manufacturing processes or office supplies. For any such “indirect” materials, an inescapable incentive conflict exists: The buyer wishes to minimize consumption of these indirect materials, while the supplier’s profits depend...