Title: Multi-period incentive policy in retailer-led supply chain
Abstract: To study incentive scheme under asymmetric information of the supplier's cost efficiency parameter and of its effort level parameter in a retailer-led supply chain, a method under a principal-Agent model and revelation principle was proposed. In this method, static incentive contract was established. Main results revealed that the static incentive contract established an incentive policy in one-period scheme to maximized retailer's profit which would motivate the supplier to give its real cost efficiency and to word hard; and that the static incentive contract could not work in multi-period because of the ratchet effect: doing more now reduces future rewards, under this circumstance, Allowance Agreement was proposed to deal with such ratchet effect.
Publication Year: 2009
Publication Date: 2009-01-01
Language: en
Type: article
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