Academic Activities
[Research]Response time and vendor–assembler relationship in a supply chain
2008.01.16 Views 1235 경영학연구분석센터
European Journal of Operational Research
Volume 184, Issue 2, 16 January 2008, Pages 652–666
Seongje Ahn (a), , Hosun Rhim (b), , S. Hun Seog (c), ,
a School of Business Administration, University of Seoul, 90 Jeonnong-Dong, Dongdaemun-Gu, Seoul 130-743, Korea
b Korea University Business School, Korea University, 1, 5 Ga, Anam-Dong, Sungbuk-Gu, Seoul 136-701, Korea
c Graduate School of Finance, Korea Advanced Institute of Science and Technology (KAIST), 207-43 Cheongryangri-Dong, Dongdaemun-Gu, Seoul 130-722, Korea
http://dx.doi.org/10.1016/j.ejor.2006.10.049
Abstract
Relationships between an assembler and a vendor in a supply chain are investigated in two-period models when the assembler wants to reduce response time by incentive systems. The assembler may offer myopic or farsighted incentive contracts to the vendor, under short-term or long-term relationships. Incentive schemes, effort levels, and expected payoffs under different perspectives and relationships are examined. We find that a farsighted assembler provides the vendor with a higher incentive than a myopic assembler in the first period. A long (short)-term relationship is preferred if the value of farsightedness under a long-term relationship is greater (less) than the switching option value under a short-term relationship. We propose several sufficient conditions regarding which perspectives and relationships are preferred.
Keywords
Supply chain management;
Response time;
Incentive scheme;
Contract;
Long-term and short-term relationships
Volume 184, Issue 2, 16 January 2008, Pages 652–666
Seongje Ahn (a), , Hosun Rhim (b), , S. Hun Seog (c), ,
a School of Business Administration, University of Seoul, 90 Jeonnong-Dong, Dongdaemun-Gu, Seoul 130-743, Korea
b Korea University Business School, Korea University, 1, 5 Ga, Anam-Dong, Sungbuk-Gu, Seoul 136-701, Korea
c Graduate School of Finance, Korea Advanced Institute of Science and Technology (KAIST), 207-43 Cheongryangri-Dong, Dongdaemun-Gu, Seoul 130-722, Korea
http://dx.doi.org/10.1016/j.ejor.2006.10.049
Abstract
Relationships between an assembler and a vendor in a supply chain are investigated in two-period models when the assembler wants to reduce response time by incentive systems. The assembler may offer myopic or farsighted incentive contracts to the vendor, under short-term or long-term relationships. Incentive schemes, effort levels, and expected payoffs under different perspectives and relationships are examined. We find that a farsighted assembler provides the vendor with a higher incentive than a myopic assembler in the first period. A long (short)-term relationship is preferred if the value of farsightedness under a long-term relationship is greater (less) than the switching option value under a short-term relationship. We propose several sufficient conditions regarding which perspectives and relationships are preferred.
Keywords
Supply chain management;
Response time;
Incentive scheme;
Contract;
Long-term and short-term relationships