Contract Analysis and Design for Supply Chains with Stochastic Demand

Book excerpt: This book is devoted to analysis and design of supply chain contracts with stochastic demand. Given the extensive utilization of contracts in supply chains, the issues concerning contract analysis and design are extremely important for supply chain management (SCM), and substantial research has been developed to address those issues over the past years. Despite the abundance of classical research, new research needs to be conducted in response to new issues emerging with the recent changing business environments, such as the fast-shortening life cycle of product and the increasing globalization of supply chains. This book addresses these issues, with the intention to present new research on how to apply contracts to improve SCM. Contract Analysis and Design for Supply Chains with Stochastic Demand contains eight chapters and each chapter is summarized as follows: Chapter 1 provides a comprehensive review of the classical development of supply chain contracts. Chapter 2 examines the effects of demand uncertainty on the applicability of buyback contracts. Chapter 3 conducts a mean-risk analysis for wholesale price contracts, taking into account contracting value risk and risk preferences. Chapter 4 studies the optimization of product service system by franchise fee contracts in the service-oriented manufacturing supply chain with demand information asymmetry. Chapter 5 develops a bidirectional option contract model and explores the optimal contracting decisions and supply chain coordination issue with the bidirectional option. Chapter 6 addresses supply chain options pricing issue and a value-based pricing scheme is developed for the supply chain options. With a cooperative game theory approach, Chapter 7 explores the issues concerning supply chain contract selection/implementation with the option contract under consideration. Chapter 8 concludes the book and suggests worthy directions for future research.