Coordinating research and development efforts for quality improvement along a supply chain

Lambertini, Luca

doi:10.1016/j.ejor.2018.03.037

Cited by 56 publications

(23 citation statements)

References 57 publications

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“…There are a number of contracts to coordinate various decisions in SCs. Revenue sharing, delay in payments, collaborative models, cost‐sharing, two‐part tariff, compensation‐based wholesale price, and buy‐back are some examples of coordination contracts (Partha Sarathi et al., ; Bai et al., ; Ebrahimi et al., ; Nematollahi et al., , ; Johari et al., ; Johari and Hosseini‐Motlagh, ; Lambertini, ; Nouri et al., ; Raj et al., ). Although coordination models have been extensively applied in forward SCs, the coordination in the reverse flow of the chain has not yet been widely applied (Hu et al., ).…”

Section: Introductionmentioning

confidence: 99%

Proposing channel coordination and horizontal cooperation in two competitive three‐echelon reverse supply chains

Rahmani

Haeri

Hosseini‐Motlagh

2019

Int Trans Operational Res

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Considering and analyzing various kinds of cooperation among supply chain members is an option for better managing each channel. It is noteworthy that in many real‐world cases, each of vertical and horizontal cooperation has an important role in the success of supply chains. Nevertheless, only vertical cooperation in most previous research is considered. This paper addresses both vertical and horizontal cooperation in two competitive reverse supply chains, each of which includes one collector, one remanufacturer, and one retailer. Our primary concern is to analyze quality improvement competition between the remanufacturers. Moreover, retail price competition between the retailers and the quality competition are simultaneously considered in the extended model. In this research, the investigated system has been analyzed under different structures including decentralized, centralized, horizontal cooperation, and coordinated decision‐making models. The results show that when the remanufacturers cooperate horizontally, the profit of each collector and that of the retailer will decrease compared with those in the decentralized structure. To overcome this problem, a new coordination contract named multiple‐link two‐part tariff is proposed to simultaneously coordinate the members of each chain. The proposed contract effectively convinces the remanufacturers to participate in the coordination model instead of the horizontal cooperation. Moreover, it provides a win–win–win condition for all chain members and improves the quality level of the remanufactured products. The results indicate the proper performance of the proposed contract in improving the benefits of the competing chains, especially when there exists no intense competition between the remanufacturers (i.e., when the market sensitivity to the quality of the remanufactured products is low and consequently less effort is needed to increase the quality of the remanufactured products). Moreover, the proposed contract not only is able to simultaneously increase both remanufactured products demand and of end‐of‐life products supply but also involves both economic and environmental benefits.

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Section: Introductionmentioning

confidence: 99%

Proposing channel coordination and horizontal cooperation in two competitive three‐echelon reverse supply chains

Rahmani

Haeri

Hosseini‐Motlagh

2019

Int Trans Operational Res

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“…First, quality is often modeled as a binary measure tied to a quality failure—product quality is either acceptable or unacceptable (Gurnani and Erkoç 2008, Jabarzare and Rasti‐Barzoki 2020, Lee and Li 2018, Nikoofal and Gümüş 2018). Second, the models capture how improvements in quality lead to increased demand, assuming that differences in quality do not affect the selling price (Lambertini 2018, Ma et al. 2013).…”

Section: Related Literaturementioning

confidence: 99%

Incentivizing Farmers to Invest in Quality through Quality‐Based Payment

Ayvaz-Cavdaroglu

Kazaz

Webster

2021

Production and Operations Management

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We consider a for‐profit cooperative that sets a quality‐based payment to its risk‐averse farmers in order to incentivize them to invest in quality improvements. The quality of the farmer's harvest is affected by his investments during the growing season. To satisfy both the farmer and the cooperative, the payment must be competitive with the open‐market prices. Cooperatives often set payments that mimic the open‐market prices; however, this practice fails to incentivize farmers to invest in quality. Our work is motivated by the evidence of farmer underinvestment in crop quality in the olive oil industry. We define and analyze a model of this system where farmers operate under random yield, quality, and open‐market price. We find that farmers consistently underinvest in crop quality under the payment policy that mimics the open‐market prices because (1) the cooperative can command a higher retail price than a farmer and (2) farmers are risk averse. We propose two alternative payment policies that are new to the agricultural literature, both of which can coordinate farmer decisions with the system but differ in terms of ease of implementation and susceptibility to risk aversion. We identify an easy‐to‐implement policy that can lead to meaningful gains when introduced in conjunction with crop insurance. We calibrate our model using data from the olive oil industry in Turkey and find a profit improvement of 10–15% over the current open‐market payment approach.

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“…In the R&D and manufacturing environment in Malaysia, "relationship" is the intervention variable of strategic supplier partnership, customer relationship, information sharing, information quality, postponement, internal operation, and technological innovation. In a dynamic model, Lambertini [8] studied the optimal design of twopart tariffs in which two firms belonging to the same supply chain invest in R&D activities to improve the perceived quality of the final product. Noori-Daryan et al [25] analyzed the optimal pricing, ordering, promised lead time, and supplier-selection policies of a pharmacological chain, under demand response time uncertainty.…”

Section: Randd Management and Coordination Of A Supply Chainmentioning

confidence: 99%

“…e main contributions of this paper are mainly reflected in the following aspects. (i) e product's innovation level, instead of the product's quality [8], is set to be the state variable. e consumers' personalized demand is increasing, and they are more sensitive to the innovation level of product, which directly affects the market demand for products.…”

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confidence: 99%

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Hao

Chen

Hong

2020

Mathematical Problems in Engineering

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The collection and sharing of consumers’ knowledge by retailers can help manufacturers improve the innovation level of products, thereby improving the performance of supply chain. However, due to the cost of collecting consumers’ knowledge, the wholesale price contract can no longer coordinate supply chain members effectively. It is necessary to study the problem how the retailers are encouraged to make more efforts for the cooperative innovation with manufacturers. This paper introduces two dynamic incentive contracts for improving collaborative innovation level in a two-player supply chain, and the impacts of these contracts on supply chain’s performance are investigated, by using a Stackelberg differential game model. The manufacturer, as a Stackelberg leader, determines the R&D investment while the retailer is responsible for the retail price and the efforts in collection of the consumer’s information (or preference) to the products. The model incorporates a wholesale price contract and two incentive contracts to better understand how the manufacturer can facilitate the retailer’s efforts in the collection of consumer’s information and increase the profits of the members of supply chain. Our results suggest that the optimal profit of the supply chain, the retailer’s efforts in the collection of consumer’s knowledge, the retail price, and the innovation level under the reward incentive contract are higher than their counterparts in other contracts. In particular, the retailer’s optimal effort under the reward incentive contract is even higher than the one in the centralized decision scenario. However, if the manufacturer commits an effort target to the retailer, it shows that the retailer’s optimal effort is independent of the target. The manufacturer’s optimal R&D investments are constants in the three contracts under the dynamic setting. Furthermore, numerical simulations show that the effort target has little impact on profits of the supply chain although it affects the decision making of supply chain members to some extent, whereas the retailer’s marginal reward offered by the manufacturer influences the innovation level of product and the supply chain’s profit significantly.

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Coordinating research and development efforts for quality improvement along a supply chain

Cited by 56 publications

References 57 publications

Proposing channel coordination and horizontal cooperation in two competitive three‐echelon reverse supply chains

Proposing channel coordination and horizontal cooperation in two competitive three‐echelon reverse supply chains

Incentivizing Farmers to Invest in Quality through Quality‐Based Payment

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

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