Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions
This paper studies the trust issue in a two-echelon supply chain information sharing process. In a supply chain, the retailer reports the forecasted demand to the supplier. Traditionally, the supplier’s trust in the retailer’s reported information is based on the retailer’s reputation. However, this...
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doaj-d7c16a40858c4364a3847a07b5eb47c72020-11-24T21:24:18ZengHindawi LimitedThe Scientific World Journal2356-61401537-744X2014-01-01201410.1155/2014/961394961394Managing Distrust-Induced Risk with Deposit in Supply Chain Contract DecisionsGuanghua Han0Ming Dong1Qi Sun2Sino-US Global Logistics Institute, Shanghai Jiao Tong University, Shanghai 200030, ChinaAntai College of Economics & Management, Shanghai Jiao Tong University, Shanghai 200052, ChinaSchool of Business Administration, Contemporary Business and Trade Research Center, Zhejiang Gongshang University, Hangzhou 310018, ChinaThis paper studies the trust issue in a two-echelon supply chain information sharing process. In a supply chain, the retailer reports the forecasted demand to the supplier. Traditionally, the supplier’s trust in the retailer’s reported information is based on the retailer’s reputation. However, this paper considers that trust is random and is also affected by the reputation and the demand gap. The supplier and retailer have been shown to have different evaluations regarding the degree of trust. Furthermore, distrust is inherently linked to perceived risk. To mitigate perceived risk, a two-stage decision process with an unpayback deposit contract is proposed. At the first stage, the supplier and the retailer negotiate the deposit contract. At the second stage, a Stackelberg game is used to determine the retailer’s reported demand and the supplier’s production quantity. We show that the deposits from the retailer’s and supplier’s perspectives are different. When the retailer’s reported demand is equal to the supplier’s forecasted demand, the retailer’s evaluation of the deposit is more than that of supplier’s. When the retailer’s reported demand is equal to the retailer’s forecasted demand, the deposit from the retailer’s perspective is at the lowest level.http://dx.doi.org/10.1155/2014/961394 |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Guanghua Han Ming Dong Qi Sun |
spellingShingle |
Guanghua Han Ming Dong Qi Sun Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions The Scientific World Journal |
author_facet |
Guanghua Han Ming Dong Qi Sun |
author_sort |
Guanghua Han |
title |
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions |
title_short |
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions |
title_full |
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions |
title_fullStr |
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions |
title_full_unstemmed |
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions |
title_sort |
managing distrust-induced risk with deposit in supply chain contract decisions |
publisher |
Hindawi Limited |
series |
The Scientific World Journal |
issn |
2356-6140 1537-744X |
publishDate |
2014-01-01 |
description |
This paper studies the trust issue in a two-echelon supply chain information sharing process. In a supply chain, the retailer reports the forecasted demand to the supplier. Traditionally, the supplier’s trust in the retailer’s reported information is based on the retailer’s reputation. However, this paper considers that trust is random and is also affected by the reputation and the demand gap. The supplier and retailer have been shown to have different evaluations regarding the degree of trust. Furthermore, distrust is inherently linked to perceived risk. To mitigate perceived risk, a two-stage decision process with an unpayback deposit contract is proposed. At the first stage, the supplier and the retailer negotiate the deposit contract. At the second stage, a Stackelberg game is used to determine the retailer’s reported demand and the supplier’s production quantity. We show that the deposits from the retailer’s and supplier’s perspectives are different. When the retailer’s reported demand is equal to the supplier’s forecasted demand, the retailer’s evaluation of the deposit is more than that of supplier’s. When the retailer’s reported demand is equal to the retailer’s forecasted demand, the deposit from the retailer’s perspective is at the lowest level. |
url |
http://dx.doi.org/10.1155/2014/961394 |
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AT guanghuahan managingdistrustinducedriskwithdepositinsupplychaincontractdecisions AT mingdong managingdistrustinducedriskwithdepositinsupplychaincontractdecisions AT qisun managingdistrustinducedriskwithdepositinsupplychaincontractdecisions |
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