Title :
Optimal contract of the manufacturer in closed loop supply chain under asymmetric information
Author :
Zhang, Fu-An ; Da, Qing-Li ; Wang, Wen-Ping
Author_Institution :
Sch. of Econ. & Manage., Southeast Univ., Nanjing, China
Abstract :
Similar to open loop supply chain, due to asymmetric information, there is the moral hazard and incentive conflict in closed loop supply chains, which may lead to bad performance and decrease profit. To deal with this problem, in the context of a single-manufacturer and single-retailer closed loop supply chain, the game between manufacturer and retailer was studied from the point of principal-agency theory. Then the contracts with which the manufacturer can coordinate the system under symmetric and asymmetric information were analyzed respectively. It was concluded that the manufacturer can utilize a menu of contracts to screen the private information to avoid the moral hazard of the retailer and promote her own profit. Finally, the result was validated by numerical analysis.
Keywords :
closed loop systems; contracts; information management; numerical analysis; open loop systems; profitability; retailing; supply chain management; closed loop supply chain; incentive conflict; moral hazard; numerical analysis; open loop supply chain; optimal contract; principal-agency theory; retailer; Conference management; Contracts; Engineering management; Ethics; Game theory; Hazards; Numerical analysis; Pulp manufacturing; Supply chain management; Supply chains; asymmetric information; closed loop supply chain; contracts; coordination;
Conference_Titel :
Management Science and Engineering, 2009. ICMSE 2009. International Conference on
Conference_Location :
Moscow
Print_ISBN :
978-1-4244-3970-6
Electronic_ISBN :
978-1-4244-3971-3
DOI :
10.1109/ICMSE.2009.5317406
