Benefit and risk analysis of consignment contracts

Wei, Hu; Li, Yongjian; Wang, Wen

doi:10.1007/s10479-015-1919-0

Cited by 17 publications

(7 citation statements)

References 25 publications

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“…They find that, when the demand is updated, the fairness preference behavior of the FLSPs affects their cooperation with the LSI, and that there exists an optimal updating time that maximizes supply chain performance. In another paper, Hu et al ( 2017 ) consider a supplier that produces a product and sells it to market through a retailer by consignment contract. They focus on two popular consignment contracts—vendor managed consignment inventory contract and consignment contract with revenue sharing.…”

Section: Profit Comparisonmentioning

confidence: 99%

Vertical value-added cost information sharing in a supply chain

et al. 2021

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We study a two-echelon supply chain with two homogeneous manufacturers and one common retailer who has full knowledge about his own value-added service cost structure that is unknown to the manufacturers. The retailer may choose to disclose his cost information to the manufacturers. Using a three-stage game-theoretic model, we derive optimal pricing strategies for each participant, and optimal information sharing strategies, and the optimal level of the value-added services for the retailer. Our study also reveals when the manufacturers should accept the disclosed information by the retailer. It is shown that information sharing does not always create a win–win situation among the partners in the supply chain. When the value-added service cost efficiency is low, the retailer is willing to share complete information with the manufacturers; however, information sharing harms the manufacturers’ profits if they accept the shared information. In contrast, when the value-added service cost efficiency is high, the common retailer has no incentive to share information with the manufacturers and the unique equilibrium is no information sharing. Finally, we utilize a revenue-sharing contract to achieve supply chain coordination and induce information sharing under asymmetric information.

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Section: Profit Comparisonmentioning

confidence: 99%

Vertical value-added cost information sharing in a supply chain

et al. 2021

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“…Moreover, CSP ensures production continuity, flexibility and increased agility, which are extremely important in dynamic and competitive markets [11]. Due to its multiple and significant advantages, the consignment inventory concept has been widely discussed in the literature in terms of fundamentals and benefits [5,[12][13], or type of contracts [14], either in case the inventory is managed by the vendor, or it is with the buyer. However, there is little research in the literature concerning the risks and constraints of consignment inventory implementation, while consignment contracts are widely applied in both physical and virtual supply chains.…”

Section: Contextual Background and Research Motivationmentioning

confidence: 99%

Proactive risk assessment via fuzzy approach in a decisional process of consignment stock program adoption

FAUR

Bungău

2021

MATEC Web Conf.

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The idea of adopting the consignment stock concept has enriched the landscape of efficient supply chains and their organizations, due to its major benefits in reducing inventory, compressing delivery time and increasing flexibility towards achieving agility and enhanced market responsiveness. The decision making process is a complex one, as besides the benefits and the economical and administrative aspects, there are also risks that must be identified, measured, assessed and managed. There is little research in the literature concerning the risks and constraints of consignment inventory implementation, while consignment contracts are widely applied in both physical and virtual supply chains. This paper introduces a model of proactive risk assessment via a fuzzy approach, allowing a sensitivity analysis of the identified risks in the matrix, in terms of probability to happen, degree of severity, impact and potential consequences, as well as mitigation. A fuzzy inference system is used to serve as assessment instrument, to fairly and more rigorously evaluate the risks, in order to avoid critical situations during or after program adoption, or even implementation failure. Fuzzy logic theory has been chosen to capture the uncertainty that usually occurs when dealing with risks and decision making. We believe that having these risk assessment insights at hand, managers and practitioners can achieve a better understanding of the challenges that come along with a new consignment program adoption, while allowing them to make the right and justified decision, in accordance with both benefit and risk considerations.

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“…In recent years, more and more owners of online marketplaces prefer to the consignment arrangement since it can shift the risk of market demand uncertainty to the suppliers (Bieniek, 2019;Lim, Wang, & Wu, 2015;Wang, Leng, & Liang, 2018). In the consignment agreement, both parties distribute the sales revenue according to a pre-arranged deal (Avinadav, Chernonog, & Perlman, 2015;Hu, Li, & Wang, 2017;Jiang, 2012;Tao, Fan, & Lai, 2019). Moreover, it should be noted that the online marketplaces face tough competition from the international and domestic enterprises.…”

Section: Introductionmentioning

confidence: 99%

Advertising strategies and coordination for supply chain based on consignment platform with delayed effect

Liu

Chen

2020

Systems Science & Control Engineering

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In this paper, the optimal control method is used to discuss the advertising investment decisions for the consignment platform, where the delayed effect of the advertising is introduced to reflect the dynamics of platform goodwill. Firstly, the optimal advertising investment policies are obtained in the integrated and decentralized decision strictures by applying the optimal control theory. Besides, the comparisons of the optimal profits are provided in two decision strictures. Our results suggest that the centralization leads to higher channel performance only when time delay is below a certain threshold. Secondly, a consignment contract with the bilateral participation and the constant platform use fees is proposed to coordinate the decentralized system. Finally, some simulations are employed to obtain more management insights and to illustrate the coordination capability of the proposed contract.

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Benefit and risk analysis of consignment contracts

Cited by 17 publications

References 25 publications

Vertical value-added cost information sharing in a supply chain

Vertical value-added cost information sharing in a supply chain

Proactive risk assessment via fuzzy approach in a decisional process of consignment stock program adoption

Advertising strategies and coordination for supply chain based on consignment platform with delayed effect

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