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Quality improvement incentive strategies in a supply chain

Seung Ho Yoo and Taesu Cheong

Transportation Research Part E: Logistics and Transportation Review, 2018, vol. 114, issue C, 331-342

Abstract: This paper investigates several incentive mechanisms for collaborative product quality improvement in a buyer-driven supply chain, and the impacts of those mechanisms on supply chain performance. The buyer, the Stackelberg leader, determines the sales price of a product while the supplier is responsible for production and product quality determination. We develop analytical models incorporating two reward schemes to better understand how the buyer can facilitate the supplier’s quality improvement efforts. We offer managerial insights and practical guidelines for implementing quality management in the supply chain, derived from both an analytical comparison and numerical experiments.

Keywords: Supply chain; Quality management; Reward contract; Incentive; Target quality (search for similar items in EconPapers)
Date: 2018
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