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Contracts Adjustment under Bilateral Information Updating in a Supply Chain by Wang, Xinhui; Su, Yingsheng; Zhou, Zihan; Fang, Yiling is a Physics and Astronomy article available to read on EtoBox.

What is Contracts Adjustment under Bilateral Information Updating in a Supply Chain about?

This paper investigates contracts adjustment between one manufacturer and one retailer under bilateral information updating. The manufacturer incurs uncertain production cost and the retailer faces uncertain demand, but they can acquire independent signals to update production cost and demand, respectively. They commit an initial agreement on an initial wholesale price, minimum order quantity, and information sharing as well as the transfer payment and decisions adjustment when information is updated. We find that due to the joint impact of production cost variation and market variation, the manufacturer may not decrease (increase) her wholesale price when the updated production cost is lower (higher) than expected. The retailer places an additional order even if the wholesale price rises when the market outlook is good, but places an order with the minimum order quantity even if the wholesale price falls when the market outlook is bad. Secondly, for a certain level of information accuracy of the production cost and market demand, the retailer is always better off with information updating, but the manufacturer may be worse off with information updating when facing a bad market out

Who reads Contracts Adjustment under Bilateral Information Updating in a Supply Chain?

Author

Wang, Xinhui; Su, Yingsheng; Zhou, Zihan; Fang, Yiling

Publisher

John Wiley and Sons; Hindawi Limited; Wiley (ISSN 1076-2787)

Published

2020

Language

EN

Field

Physics and Astronomy (Physical Sciences)