Volume 56, Number 3, May-June 2022
|Page(s)||1321 - 1333|
|Published online||02 June 2022|
Supply chain contracting considering the cost structure between capacity and quality under information asymmetry
School of Artificial Intelligence and Automation, Huazhong University of Science and Technology, Wuhan 430074, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 17 April 2022
This paper studies the supply chain contracting problem to ensure on-time delivery of high-quality products from the supplier to the buyer. The notions of complements and substitutes are utilized to describe the correlation among the supplier’s production cost, production capacity, and product quality, i.e., the cost structure between capacity and quality. A principal-agent model is proposed to solve the supply chain contracting considering the cost structure between capacity and quality under information asymmetry. We derive the conditions for complements and substitutes and the optimal menu of contracts. Our results indicate that the cost structure plays an important role in supply chain contracting.
Mathematics Subject Classification: 90B50 / 91A80 / 91B41 / 91B43
Key words: Supply chain contracting / cost structure / capacity / quality / information asymmetry
© The authors. Published by EDP Sciences, ROADEF, SMAI 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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