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

Meng Su () and Hongjie Lan ()
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Meng Su: Beijing Jiaotong University
Hongjie Lan: Beijing Jiaotong University

A chapter in LISS 2014, 2015, pp 1325-1330 from Springer

Abstract: 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.

Keywords: False failure returns; Supply chain; Effort; Service level constraint (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-662-43871-8_192

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DOI: 10.1007/978-3-662-43871-8_192

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