Dual-channel Supply Chain Coordination with New Buy-back Contract Based on Fairness Preference Theory

Wei, Guangxing; Lin, Qiang

doi:10.3923/itj.2014.1094.1101

Cited by 2 publications

(4 citation statements)

References 9 publications

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“…Kundu et al (2015) systematically reviewed the cross-disciplinary literature covering the time period from 1934 to January 2013 on behavioral operations in supply chain to identify and define the taxonomy of the research on power influences in supply chain. Wei and Lin (2014) assumed that a manufacturer is self-interested and the buyer has a fairness preference. They constructed a Stackelberg game model by applying the fairness preference theory and designed a new buy-back contract to coordinate the dual-channel supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Some studies have been completed on the fairness problem that concerns in operations decisions, especially in supply chain decision-making process (Cui et al , 2007; Wei and Lin, 2014; Nie, 2014; Cui et al , 2007; Bruyn and Bolton, 2008; Yang et al , 2013; Zhou et al , 2016; Ghorabaee et al , 2017; Anbarci and Feltovich, 2017). Cui et al (2007) incorporated the concept of fairness in a conventional dyadic (between two parties) channel to investigate how fairness may affect channel coordination.…”

Section: Literature Reviewmentioning

confidence: 99%

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Behavioral operations effect of fairness and unfairness concern in the decision of the supply chain production-inventory system

Chen

Sarker³

2021

JM2

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Purpose The purpose of this paper is to investigate the behavioral operations effect in production inventory decision of supply chain consisting of one manufacturer and one buyer, and analyze how the unfairness concerns impact the decision of production inventory in a supply chain system. Design/methodology/approach First, a model without the buyer’s unfairness concern is established; then, advantage unfairness concern and disadvantage unfairness concern behavior of buyer are taken into account in the production inventory system. The authors analyze how advantage unfairness concern and disadvantage unfairness concern impact the optimal decisions and channel coordination. Findings The result shows several important conclusions. First, the buyer’s optimal ordering quantity and expected utility show opposing trend when the buyer has advantage unfairness concern. Second, the stronger bargaining power of the manufacturer results in an increasing buyer’s optimal ordering quantity under the advantage unfairness concern case, but decreasing under the disadvantage unfairness concern case. Third, the supply chain production-inventory can be coordinated under advantage unfairness concern case, but cannot be coordinated under disadvantage unfairness concern. Practical implications The study can provide to practitioners with important implications that when the vendor or the buyer in supply chain wants to make the decision of inventory replenishment, taking unfairness concerns into account will lead to different results. Therefore, to effectively improve the operations performance of supply chain, partners of the supply chain should not only care about their own interest, but also need to consider the fairness concern of the other partner, reflecting the cooperation consciousness of supply chain management. Originality/value This paper contributes to the new field of creative management–behavioral operations, offering managerial implications for the decision and optimization of supply chain production-inventory problem.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Behavioral operations effect of fairness and unfairness concern in the decision of the supply chain production-inventory system

Chen

Sarker³

2021

JM2

View full text Add to dashboard Cite

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“…However, these early studies only considered demand to be sensitive to retail price and did not include non-price factors. Wei and Lin (2014) explored the effects of fairness concerns on effort strategies with non-linear stochastic demand [ 26 ]. Ge (2015) studied effort decisions in the retailer-dominated supply chain considering suppliers’ fairness.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Bi, He, and Luo et al (2013) demonstrated that a sales-rebate contract regarding fairness broadens the voluntary cooperation prospects and increases the overall profit of the supply chain [ 33 ]. Some other coordinating contracts with fairness concerns have also been fully characterized in different contexts, such as revenue-sharing contracts (Li Q et al [ 29 ]; Wang X et al [ 34 ]; Pu X J et al [ 35 ]) and buy-back contracts (Wei G et al [ 36 , 37 ]). Although these articles considered more complex issues, the majority of them also simplified the functions that characterize fairness concerns.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on supply chain performance based on retailers’ fairness concerns: Wholesale prices versus cost sharing of efforts

et al. 2018

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With the deepening of the research on supply chain management, scholars have increasingly begun to investigate the impact of fairness on a supply chain, and many conclusions suggest that a simple wholesale price can coordinate a supply chain under specific conditions. However, the corresponding analysis and other optimization mechanisms that affect the situation in which the channel cannot be coordinated are either omitted or given little attention. In this paper, we constructed a dyadic supply chain with a single manufacturer and a single retailer; the manufacturer acts as a selfish leader, and the retailer acts as a follower with fairness concerns and sales efforts. For this setting, we derived the equilibrium strategy solution for a wholesale price contract and cost sharing of effort (CS-E) contract offered by the manufacturer, and the results indicated that both contracts achieved channel coordination with different requirements. Further, the profit of the manufacturer and the sales effort of the retailer under CS-E contracts were never less than those for the wholesale price contract, and there was an interval during which the retailer's profit and utility and supply chain efficiency were better than those under the wholesale price contract. In addition, we described situations in which a CS-E contract is unnecessary. These results should be a useful reference for managerial decisions and organizations.

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Dual-channel Supply Chain Coordination with New Buy-back Contract Based on Fairness Preference Theory

Cited by 2 publications

References 9 publications

Behavioral operations effect of fairness and unfairness concern in the decision of the supply chain production-inventory system

Behavioral operations effect of fairness and unfairness concern in the decision of the supply chain production-inventory system

Research on supply chain performance based on retailers’ fairness concerns: Wholesale prices versus cost sharing of efforts

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