Literature Review on Supply Chain Contracts

Abstract

This chapter gives an introduction to the supply chain contracting literature. Departing from a classic supply chain model, we classify the parameters over which supply chain contracts are usually observed. The focus of this chapter is on contracts coordinating a two-firm supply chain in a single-period newsvendor setting. Hence, a basic newsvendor model as well as contracts coordinating this setting are introduced. Moreover, extensions to the basic newsvendor model and current research on supply chain contracts are presented. Particular attention is given to research on QF and buy-back contracts. The goal is to contrast these two returns mechanisms in the light of formal supply chain contracting to provide a basis for later analysis and discussion in the context of relational contracting.