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Conference Paper: Quantity discount contract for supply chain coordination with false failure returns

TitleQuantity discount contract for supply chain coordination with false failure returns
Authors
KeywordsClosed-loop supply chains
Consumer returns
Quantity discount contract
Supply chain coordination
Issue Date2010
PublisherIEEE. The Journal's web site is located at http://ieeexplore.ieee.org/xpl/conhome.jsp?punumber=1001312
Citation
The 6th International Conference on Natural Computation (ICNC 2010), Yantai, Shandong, China, 10-12 August 2010. In Proceedings of the International Conference on Natural Computation, 2010, v. 8, p. 4450-4454 How to Cite?
AbstractConsumer return attracts more and more academic attention due to its rapidly expanding size, and a large portion of it falls into the category of false failure return, which refers to return without functional defect. In this paper, we exclusively consider profit results from exerting costly effort to reduce false failure returns in a reverse supply chain consisting of a retailer and a supplier. The supply chain as a whole has strong incentive to reduce false failure returns because it can avoid much reprocessing cost associated. But typically, retailers enjoy a full credit provided by suppliers in case of returns, and hence they may not have sufficient incentives to exert enough effort for supply chain profit maximization. In some scenarios they may even have the motivation to actually encourage such returns. We suggest using a coordination contract to resolve such profit conflicts. The contract we propose is a quantity discount contract specifying a payment to the retailer with an amount exponentially decreasing in the number of false failure returns. We give explicit forms of such contracts given different assumptions about distribution of the number of returns and we also prove that such contract is capable of increasing both retailer's and supplier's profit simultaneously. Besides, when the contract is used together with other forward supply chain coordination contracts in a closed-loop chain, it is shown that it can act to deter retailer's potential incentive to encourage false failure returns. Moreover, some modifications of the contract may lead to easy allocation of incremental profit within the supply chain. © 2010 IEEE.
Persistent Identifierhttp://hdl.handle.net/10722/129747
ISBN
References

 

DC FieldValueLanguage
dc.contributor.authorHuang, Xen_HK
dc.contributor.authorChoi, SMen_HK
dc.contributor.authorChing, WKen_HK
dc.date.accessioned2010-12-23T08:41:43Z-
dc.date.available2010-12-23T08:41:43Z-
dc.date.issued2010en_HK
dc.identifier.citationThe 6th International Conference on Natural Computation (ICNC 2010), Yantai, Shandong, China, 10-12 August 2010. In Proceedings of the International Conference on Natural Computation, 2010, v. 8, p. 4450-4454en_HK
dc.identifier.isbn978-1-4244-5961-2-
dc.identifier.urihttp://hdl.handle.net/10722/129747-
dc.description.abstractConsumer return attracts more and more academic attention due to its rapidly expanding size, and a large portion of it falls into the category of false failure return, which refers to return without functional defect. In this paper, we exclusively consider profit results from exerting costly effort to reduce false failure returns in a reverse supply chain consisting of a retailer and a supplier. The supply chain as a whole has strong incentive to reduce false failure returns because it can avoid much reprocessing cost associated. But typically, retailers enjoy a full credit provided by suppliers in case of returns, and hence they may not have sufficient incentives to exert enough effort for supply chain profit maximization. In some scenarios they may even have the motivation to actually encourage such returns. We suggest using a coordination contract to resolve such profit conflicts. The contract we propose is a quantity discount contract specifying a payment to the retailer with an amount exponentially decreasing in the number of false failure returns. We give explicit forms of such contracts given different assumptions about distribution of the number of returns and we also prove that such contract is capable of increasing both retailer's and supplier's profit simultaneously. Besides, when the contract is used together with other forward supply chain coordination contracts in a closed-loop chain, it is shown that it can act to deter retailer's potential incentive to encourage false failure returns. Moreover, some modifications of the contract may lead to easy allocation of incremental profit within the supply chain. © 2010 IEEE.en_HK
dc.languageengen_US
dc.publisherIEEE. The Journal's web site is located at http://ieeexplore.ieee.org/xpl/conhome.jsp?punumber=1001312-
dc.relation.ispartofProceedings - 2010 6th International Conference on Natural Computation, ICNC 2010en_HK
dc.rightsProceedings of the International Conference on Natural Computation. Copyright © IEEE.-
dc.rights©2010 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE.-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectClosed-loop supply chainsen_HK
dc.subjectConsumer returnsen_HK
dc.subjectQuantity discount contracten_HK
dc.subjectSupply chain coordinationen_HK
dc.titleQuantity discount contract for supply chain coordination with false failure returnsen_HK
dc.typeConference_Paperen_HK
dc.identifier.emailChing, WK:wching@hku.hken_HK
dc.identifier.authorityChing, WK=rp00679en_HK
dc.description.naturepublished_or_final_version-
dc.identifier.doi10.1109/ICNC.2010.5583488en_HK
dc.identifier.scopuseid_2-s2.0-78149294374en_HK
dc.identifier.hkuros176904en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-78149294374&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume8en_HK
dc.identifier.spage4450en_HK
dc.identifier.epage4454en_HK
dc.publisher.placeUnited States-
dc.description.otherThe 6th International Conference on Natural Computation (ICNC 2010), Yantai, Shandong, China, 10-12 August 2010. In Proceedings of the International Conference on Natural Computation, 2010, v. 8, p. 4450-4454-
dc.identifier.scopusauthoridHuang, X=36617352800en_HK
dc.identifier.scopusauthoridChoi, SM=26435077400en_HK
dc.identifier.scopusauthoridChing, WK=13310265500en_HK

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