Lecture Notes in Economics and Mathematical Systems: Optimal Concessions in Return Policies for Continuous Quality Improvements

Höhn, Michaela Isabel

Supply relations are often governed by so-called relational contracts. These are informal agreements sustained by the value of future cooperation. Although relational contracts persist in practice, research on these types of contract is only emerging in Operations and Supply Chain Management. This book studies a two-firm supply chain, where repeated transactions via well-established supply contracts and continued quality-improvement efforts are governed by a relational contract. We are able to characterize an optimal relational contract, i.e., to develop policies for supplier and buyer that structure investments in quality and flexibility in a way that no other self-enforcing contract generates higher expected joint surplus. A second goal is to compare the performance of different returns mechanisms in the context of relational contracting (quantity flexibility and buy-back contracts). Industry studies motivate the presented model.

Details

Published by: Springer

Publication Date: 2009-10-15

Format: Paperback

ISBN-13: 9783642027901

DOI: 10.1007/978-3-642-02791-8

Dimensions: 235cm x155cm

Pages: 124