Relational Supply Contracts - Optimal Concessions in Return Policies for Continuous Quality Improvements

Supply relations are often governed by so-called relational contracts. These are informal agreements sustained by the value of future cooperation. Although relational contracts persist in practice, research on these types of contract is only emerging in Operations and Supply Chain Management. This book studies a two-firm supply chain, where repeated transactions via well-established supply contracts and continued quality-improvement efforts are governed by a relational contract. We are able to characterize an optimal relational contract, i.e., to develop policies for supplier and buyer that structure investments in quality and flexibility in a way that no other self-enforcing contract generates higher expected joint surplus. A second goal is to compare the performance of different returns mechanisms in the context of relational contracting (quantity flexibility and buy-back contracts). Industry studies motivate the presented model.

List of contents

Literature Review on Supply Chain Contracts.- Relational Contracts.- Relational Contracts and Optimal Quantity Flexibility.- Relational Contracts and Optimal Buy-Back Price.- QF vs. Buy-Back Contract in Buyer-Supplier Relationships.- Case Study: Supplier Relationship Management at Volkswagen Group.- Conclusion and Outlook.

Product details

• Authors: Michaela Isabel Höhn
• Publisher: Springer, Berlin
• Languages: English
• Product format: Paperback / Softback
• Released: 15.10.2009
• EAN: 9783642027901
• ISBN: 978-3-642-02790-1
• No. of pages: 124
• Dimensions: 155 mm x 8 mm x 239 mm
• Weight: 225 g
• Illustrations: XVI, 124 p. 27 illus.
• Series: Lecture Notes in Economics and Mathematical Systems
• Subjects: Social sciences, law, business > Business > Management; Operations Research, C, Optimization, Procurement, Business and Management, Economic theory & philosophy, Economic Theory, Operations Research/Decision Theory, Operations Research and Decision Theory, Management decision making, Management science, Operational research, Decision Making, Quantitative Economics, Mathematical optimization, Economic Theory/Quantitative Economics/Mathematical Methods, Industrial procurement