Quick response in manufacturer-retailer channels
Management Science - Special issue on frontier research in manufacturing and logistics
Backup agreements in fashion buying—the value of upstream flexibility
Management Science
The Quantity Flexibility Contract and Supplier-Customer Incentives
Management Science
Selling to the Newsvendor: An Analysis of Price-Only Contracts
Manufacturing & Service Operations Management
The Value of Information Sharing in a Two-Level Supply Chain
Management Science
Supply Chain Inventory Management and the Value of Shared Information
Management Science
Supply chain planning for hurricane response with wind speed information updates
Computers and Operations Research
Joint quantity flexibility for multiple products in a decentralized supply chain
Computers and Industrial Engineering
Hi-index | 0.01 |
In this paper, we consider a decentralized supply chain consisting of two independent players--a manufacturer and a retailer. Under a quantity flexibility contract, the retailer first proposes an initial forecast as the production reference to the manufacturer. Then she uses Bayesian procedure to update demand information, and makes ultimate purchase commitment, which is constrained by the negotiated flexibility and the manufacturer's production. We model the incentives of both parties and investigate the effect of flexibility ω, transfer price c and number of Bayesian updates n on the performance of two parties. Our theoretical analysis and numerical results show that given other parameters fixed, more flexibility always benefits the retailer, while the manufacturer can only benefit from very small quantity flexibility. In addition, this contract allows them to share the benefits from information updating.