Robustness of Supply Chain Coordination Contracts: Taxonomy, Examples, and Structural Results

32 Pages Posted: 15 Jun 2011 Last revised: 3 Apr 2015

See all articles by Meng Lu

Meng Lu

A.C. Nielsen

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Houmin Yan

The Chinese University of Hong Kong (CUHK) - Department of Systems Engineering & Engineering Management

Date Written: April 1, 2015

Abstract

Supply chain coordination and associated contracts have been active research topics in supply chain management. Yet, little has been done in addressing the robustness of the design, evaluation, and implementation of such contracts. We develop a consistency framework for supply chain contracts and classify a number of well-studied contracts into groups. We demonstrate with examples that a contract can be evaluated by its consistency properties. Based on precise mathematical definitions and subsequently developed structural properties and management insights, we are not only able to measure the quality of a contract but also to reveal the nature of its coordination. Our findings open an avenue for design, evaluation and implementation of supply chain coordinating contracts.

Keywords: supply chain contracts, coordination, consistency, robustness

Suggested Citation

Lu, Meng and Sethi, Suresh and Yan, Houmin, Robustness of Supply Chain Coordination Contracts: Taxonomy, Examples, and Structural Results (April 1, 2015). Available at SSRN: https://ssrn.com/abstract=1864548 or http://dx.doi.org/10.2139/ssrn.1864548

Meng Lu

A.C. Nielsen ( email )

2/F, East Ocean Center (Phase II)
618 Yan An Road East
Shanghai, 200001
China

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

Houmin Yan (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Systems Engineering & Engineering Management ( email )

Shatin, New Territories
Hong Kong

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