Dynamic Contract under Quick Response in a Supply Chain with Information Asymmetry

• 成果类型: Article
• 署名作者: Zhang, Jiahua; Qi, Lian; Tong, Shilu
• 署名单位: Dongbei University of Finance & Economics; Rutgers University System; Rutgers University New Brunswick; The Chinese University of Hong Kong, Shenzhen; Shenzhen Research Institute of Big Data
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13321
• 发表日期: 2021
• 页码: 1273-1289
• 关键词: Information asymmetry; Information rent; quick response; inventory carryover

摘要

We investigate a dynamic contracting problem in a supply chain with a manufacturer selling a seasonal product through a retailer over two periods. In period 1, which is before the selling season, neither firm knows the demand information. The manufacturer runs on the regular production mode with low production cost but long lead time. In period 2, which refers to the selling season, only the retailer can update the demand information, so information asymmetry exists in the supply chain. The manufacturer may further produce and supplement the retailer via a second contract. However, only a mode of quick response with a shorter lead time but higher cost is viable, if the manufacturer decides not to carry inventory from period 1 to period 2. We formulate this dynamic contracting problem into four models based on whether the manufacturer adopts quick response or carries inventory. We show that the adoption of quick response may not always benefit the manufacturer due to the information rent she has to sacrifice, and the manufacturer may be better off under a higher cost of quick response. Interestingly, the capability of inventory carryover always hurts the manufacturer regardless of the implementation of QR. Essentially, we find that one of the hurdles of implementing these capabilities comes from the incentive issues in a decentralized supply chain. The retailer may ask for information rent whenever the manufacturer adopts a capability for supplying him in period 2, especially if this capability is inflexible that requires advance production before demand realization.