There are many materials for which the quantity needed by a firm is at best indirectly related to the quantity of final product produced by that firm, such as solvents in manufacturing processes or office supplies. For any such "indirect" materials, an inescapable incentive conflict exists: The...

Consider a supply chain consisting of two independent agents, a supplier (e.g., a manufacturer) and its customer (e.g., a retailer), the latter in turn serving an uncertain market demand. To reconcile manufacturing/procurement time lags with a need for timely response to the market, such supply...

We value the option of subcontracting to improve financial performance and system coordination by analyzing a competitive stochastic investment game with recourse. The manufacturer and subcontractor decide separately on their capacity investment levels. Then demand uncertainty is resolved and...

As widely accepted performance measures in supply chain management practice, frequency-based service levels such as fill rate and stockout rate are often considered in supply contracts under vendor-managed-inventory (VMI) programs. Using a decentralized two-party capacitated supply chain model...

The Quantity Flexibility (QF) contract is a method for coordinating materials and information flows in supply chains operating under rolling-horizon planning. It stipulates a maximum percentage revision each element of the period-by-period replenishment schedule is allowed per planning...

This paper studies a buyer's procurement strategies in a two-stage supply chain with price-sensitive demand. The buyer procures a product from a supplier and then sells to the marketplace. Market demand is stochastic and depends on the buyer's selling price. The supplier's production cost is...

We study how online business-to-business (B2B) exchanges affect buyer-supplier relationships where an exchange takes the role of a secondary market in which buyers (of the initial product) can trade excess inventory to address supply and demand imbalances. Over the last several years, B2B...

This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract...

We examine the problem of developing supply contracts that encourage proper coordination of forecast information and production decisions between a manufacturer and distributor of high fashion, seasonal products operating in a two-mode production environment. The first production mode is...