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EOR
2008

Response time and vendor-assembler relationship in a supply chain

13 years 11 months ago
Response time and vendor-assembler relationship in a supply chain
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.
Seongje Ahn, Hosun Rhim, S. Hun Seog
Added 10 Dec 2010
Updated 10 Dec 2010
Type Journal
Year 2008
Where EOR
Authors Seongje Ahn, Hosun Rhim, S. Hun Seog
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