Contracting for Quality in a Multiple-Level Global Supply Chain

Yang Dong, Kefeng Xu () and Sining Song
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Kefeng Xu: UTSA

Working Papers from College of Business, University of Texas at San Antonio

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.

Keywords: Incentive mechanism design; supply chain quality; quality assurance; multi-tier supply chain. (search for similar items in EconPapers)
JEL-codes: C70 D21 D82 D86 L14 L15 M11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014
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