On supply chain coordination for false failure returns: A quantity discount contract approach

被引:76
作者
Huang, Ximin [1 ]
Choi, Sin-Man [1 ]
Ching, Wai-Ki [1 ]
Siu, Tak-Kuen [2 ,3 ]
Huang, Min [4 ]
机构
[1] Univ Hong Kong, Adv Modeling & Appl Comp Lab, Dept Math, Hong Kong, Hong Kong, Peoples R China
[2] Macquarie Univ, Dept Actuarial Studies, Sydney, NSW 2109, Australia
[3] Macquarie Univ, Ctr Financial Risk, Fac Business & Econ, Sydney, NSW 2109, Australia
[4] Northeastern Univ, Coll Informat Sci & Engn, Shenyang 110004, Peoples R China
关键词
Consumer returns; Closed-loop supply chains; Quantity discount contract; Supply chain coordination; RETAILERS;
D O I
10.1016/j.ijpe.2011.04.031
中图分类号
T [工业技术];
学科分类号
08 ;
摘要
A large proportion of consumer returns fall into the category of false failure returns, which refer to returns without functional defects. In this paper, we consider profits resulting from exerting costly effort to reduce false failure returns in a reverse supply chain. The supply chain as a whole has a strong incentive to reduce such returns for cost saving. However, retailers typically enjoy a full credit provided by suppliers for returns, so they may not have sufficient incentives to exert enough effort for supply chain profit maximization. In some scenarios retailers may even have the motivation to encourage such returns. We suggest using a coordination contract to resolve this profit conflict. We introduce a quantity discount contract which specifies a payment to the retailer with an amount exponentially decreasing in the number of returns. We present explicit forms of such contracts given different assumptions about the distribution of the number of returns. We also prove that the contract is Pareto improving. Besides, it is shown that when the contract is applied in a closed-loop supply chain, it can deter retailer's potential incentive to encourage returns. Moreover, some modifications of the contract can lead to easy allocation of supply chain profit. (C) 2011 Elsevier B.V. All rights reserved.
引用
收藏
页码:634 / 644
页数:11
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