Quality efforts in medical supply chains considering patient benefits
Yeming Gong and
European Journal of Operational Research, 2019, vol. 279, issue 3, 795-807
We consider supply chain (SC) contracts in a new setting, the medical equipment industry, where concern for patient benefits is essential and quality efforts are critical for profits compared with supply chains (SCs) in other industries. It remains unclear how quality efforts and patient concern levels affect SC performance and how medical equipment manufacturers’ quality effort levels are linked to their patient concern levels. This study focuses on the impact of a manufacturer's and a retailer's patient concern levels on optimal pricing and quality decisions in an SC consisting of a manufacturer facing quality effort-dependent demand and a retailer in the medical equipment industry. We use the Stackelberg game to characterize and determine the optimal operational decisions in five scenarios and address the effects of patient concern levels under above five scenarios. A real case is studied and shows that optimized quality efforts can improve SC profits. The parameters settings are derived from the real data. Our findings bridge the gap between SC quality management and patient benefits and help to understand contract design in relation to patient concerns in different SC structures. This paper is among the earliest to investigate quality efforts for SC contract design in relation to patient concerns and to study SC contract design in the medical equipment industry. Our managerial insights are expected to help manufacturers move toward better quality effort decisions considering patient benefits and are also applicable to other SCs with effort-dependent demand and the effect of altruistic preferences.
Keywords: Supply chain management; Supply chain contract; Sustainability; Quality management; Welfare (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:279:y:2019:i:3:p:795-807
Access Statistics for this article
European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati
More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().