Selling to the Newsvendor: An Analysis of Price-Only Contracts
Manufacturing & Service Operations Management
The Impact of the Secondary Market on the Supply Chain
Management Science
The Effect of Collaborative Forecasting on Supply Chain Performance
Management Science
Product Development Decisions: A Review of the Literature
Management Science
Information, Contracting, and Quality Costs
Management Science
Designing Supply Contracts: Contract Type and Information Asymmetry
Management Science
Salesforce Incentives, Market Information, and Production/Inventory Planning
Management Science
A Principal-Agent Model for Product Specification and Production
Management Science
Information Distortion in a Supply Chain: The Bullwhip Effect
Management Science
Optimal Mechanisms with Finite Agent Types
Management Science
Sale Timing in a Supply Chain: When to Sell to the Retailer
Manufacturing & Service Operations Management
Score! a better way to do busine$$: moving from conflict to collaboration
Score! a better way to do busine$$: moving from conflict to collaboration
Dynamic Cost Reduction Through Process Improvement in Assembly Networks
Management Science
Second Sourcing vs. Sole Sourcing with Capacity Investment and Asymmetric Information
Manufacturing & Service Operations Management
Contracting for Collaborative Services
Management Science
Trust in Forecast Information Sharing
Management Science
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During development of an innovative product there is often considerable uncertainty about component production cost, and it is of interest for both the manufacturer and the supplier to engage in a collaborative effort to reduce this uncertainty and lower the expected cost. Despite the obvious benefits this brings, the supplier may be reluctant to collaborate as he fears revealing his proprietary cost information. We investigate how information asymmetry and procurement contracting strategies interact to influence the supply chain parties' incentives to collaborate. We consider a number of procurement contracting strategies, and identify a simple strategy, expected margin commitment EMC, that effectively promotes collaboration. The manufacturer prefers EMC if collaboration leads to a large reduction in unit cost and/or demand variability is low. Otherwise, a screening contract based on price and quantity is preferred. We also find that, paradoxically, ex post efforts to enhance supply chain efficiency may hinder ex ante collaboration that precedes production. This paper was accepted by Yossi Aviv, operations management.