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Supply-chains (SC) present performance bottlenecks that contribute to a high level of costs, infiltration of product quality, and impact productivity. Examples of such inhibitors include the bullwhip effect, new product lines, high inventory, and restrictive data flows. These bottlenecks can force manufacturers to source more raw materials and increase production significantly. Also, restrictive data flow in a complex global SC network generally slows down the movement of goods and services. The use of Distributed Ledger Technologies (DLT) in supply chain management (SCM) demonstrates the potentials to to reduce these bottlenecks through transparency, decentralization, and optimizations in data management. These technologies promise to enhance the trustworthiness of entities within the supply chain, ensure the accuracy of data-driven operations, and enable existing SCM processes to migrate from a linear to a fully circular economy. This paper presents a comprehensive review of 111 articles published in the public domain in the use and efficacy of DLT in SC. It acts as a roadmap for current and future researchers who focus on SC Security Management to better understand the integration of digital technologies such as DLT. We clustered these articles using standard descriptors linked to trustworthiness, namely, immutability, transparency, traceability, and integrity.

Post COVID-19 vaccine development, nations are now getting ready to face another challenge: how to effectively distribute vaccines amongst the masses to quickly achieve herd immunity against the infection. According to some experts, herd immunity for COVID-19 can be achieved by inoculating 67% of the population. India may find it difficult to achieve this service level target, owing to several infrastructural deficiencies in its vaccine supply chain. Effect of these deficiencies is to cause frequent lead time disruptions. In this context, we develop a novel modelling approach to identify few nodes, which require additional inventory allocations (strategic inventory reserves) to ensure minimum service level (67%) under the possibility of lead time disruptions. Later, through an illustrative case study on distribution of Japanese Encephalitis vaccine, we identify conditions under which strategic inventory reserve policy cannot be practically implemented to meet service level targets. Nodes fulfilling these conditions are termed as critical nodes and must be overhauled structurally to make the implementation of strategic inventory policy practically viable again. Structural overhauling may entail installation of better cold storage facilities, purchasing more quality transport vans, improving reliability of transport network, and skills of cold storage manager by training. Ideally, conditions for identifying critical nodes for COVID-19 vaccine distribution must be derived separately by substituting COVID-19 specific parametric values in our model. In the absence of the required data for COVID-19 scenario, JE specific criteria can be used heuristically to identify critical nodes and structurally overhaul them later for efficiently achieving service level targets.

© Copyright 2022 The Author(s). In this article, with the increased disruptions faced by businesses and the occurrence of natural disasters in the world, supply chain resilience remains a major challenge especially for small- and medium-sized enterprises (SMEs). Despite the relevance of SMEs to the economy, there is limited scholarly work on resilience practices in SMEs and a limited understanding of how SMEs can achieve resilience. To understand the role of supply chain resilience in SMEs, we undertake a systematic literature review (SLR), which results in the identification and analysis of 101 journal articles, published between 2006 and 2019, on SME supply chain resilience. Our analysis into SME supply chain resilience highlights four focal areas: 1) the role of collaboration and culture; 2) the role of SMEs’ capabilities; 3) the role of Information Systems; and (4) the role of cost and financing. Our SLR investigation identifies future research directions and focal areas tailored to SMEs to help them to assess and develop their supply chain resilience.

In this article, we explore the topic of supply chain resilience (SCR) in an open-system context. Systems theory and cybernetics are important methodologies in the analysis of complex networks. However, relatively little is known about their application in the supply chain (SC) operations. Using systems theory and cybernetics for SCR conceptualization, we argue that a systems-theoretical lens can help to extend the state-of-the-art research to describe SCR based on the concept of balancing vulnerability and recoverability over time. Toward this end, we define and test a new resilience measure for SCR using the Bayesian network approach with a compounding function of vulnerability and recoverability. We further propose managerial actions for implementing an open-system view of SCR. To demonstrate the applicability and usefulness of our method, we measure and analyze the resilience levels of a manufacturer. Our results provide useful decision-making support and can be valuable for SC managers seeking to balance risk mitigation and recovery capabilities. The framework and measure developed can also be used to guide firms seeking to analyze the impact of disruptions on SCs through the consideration of both performance degradation and recovery.

Many small and medium enterprises (SMEs) engage in dyadic information integration partnerships or partial integration with their direct suppliers and customers. They often utilize e-commerce or cloud computing technology platforms hosted by third-party providers to leverage such partnerships. However, information security breaches and disruptions caused by cyberattacks are commonplace in the information technology industry. The effects of said disruptions and breaches on e-commerce businesses under varied disruption conditions are still uncertain. Furthermore, the effect of security breaches on nonparticipating members of the supply chain is poorly understood, especially under various disruption profiles. Using discrete event modeling, in this article, we explore the impact of disruption caused by information security breaches on supply chain performance and the externality effect of partial integration on nonparticipants. We also examine the impact of breach disruption frequency and remediation length on supply chain performance with varying levels of information sharing. These impacts were studied under two typical inventory replenishment policies for SMEs. It was determined that remediation length should be a prioritized factor in impact management and that flexibility in the inventory replenishment policy can help mitigate the impact of information disruption on the inventory performance of businesses, especially that of nonparticipants, in information-sharing partnerships.

Today, firms pursuing a pioneering strategy are often engaged in supply chain relationships to benefit from external resources and to improve their innovation. However, this effort can be impeded by power asymmetries in such relationships and especially by the execution of coercive power by their partner firm. Contracts could potentially reduce this risk of opportunistic behavior. Our survey study on 778 small to medium-sized enterprises in the European packaging and medical equipment industries examines how coercive power of the partner and the contractual arrangement between firms moderate the pioneering strategy's innovation outcomes in the short and long run. Our results confirm the negative effect of coercive power on innovation performance in both the short and long term. However, the compensating effect of rather complete contracts differs temporally. Whereas, contract completeness protects against higher dependence at the beginning of the collaboration, their effect diminishes over time. In contrast, rather incomplete contracts enhance the innovation performance in the long term, possibly complemented with trust.

This article considers a two-stage supply chain consisting of a supplier and two competing multichannel retailers and examines their channel and pricing strategies. The supplier wholesales a product to the retailers who resell the product to consumers with different channel preferences. The retailers can either operate their online and offline channels separately and apply differential pricing strategy, or choose to integrate the channels and adopt unified pricing strategy. We establish a game-theoretical model to derive the optimal wholesale price of the supplier and equilibrium retailing prices of the two retailers, and investigate the impact of consumer structure and channel integration ability on the prices, demands, and profits. We then analyze the effect of channel integration and discuss the equilibrium strategy. We find no adoption, asymmetric adoption, and symmetric adoption of channel integration strategy are all possible equilibria. However, one or the both retailers can be worse off in the competition, while the supplier can be always better off if any retailer integrates the channels. Our results suggest that retailers should be very cautious when deciding whether to integrate channels under competition, and the supplier could design other mechanisms to encourage the retailers to integrate their channels.

Closed-loop supply chain (CLSC) implementation has become imperative for organizations owing to resource scarcity and generation of toxic waste. However, CLSC implementation can be very challenging due to several barriers, especially in an emerging manufacturing hub such as India. This article identifies and analyzes the prominent barriers to CLSC implementation in the Indian automotive sector. Further, this article also examines causal relationships between the barriers. A total of 22 barriers to CLSC implementation are identified from the literature and subsequently, validated by industry experts. The finalized barriers are then evaluated by analytical hierarchy process and grey–decision making trial and evaluation laboratory techniques. This article provides managers and policy makers with insights on the most prominent and causal barriers, and recommends strategies to overcome these barriers. The findings will help managers to frame short-term and long-term strategies to mitigate barriers to CLSC and contribute toward successful implementation of CLSC.

With the advent of responsible business, ensuring social responsibility in sourcing is of interest to both academics and practitioners. In this study, we examine one way of achieving this goal: ethical sourcing initiatives (ESIs). ESIs refer to a firm’s formal and informal actions to manage sourcing processes in an ethical and socially responsible manner. While ESIs have been established as an important part of corporate social responsibility, it is unclear whether, how, and when this corporate effort is economically beneficial. We conduct an event study estimating the shareholder value effect of 159 publicly traded firms’ ESIs and find that the stock market reacts positively to ESIs in general. We also compare market reactions under different conditions including reactive versus proactive ESIs, and their interactions with initiative timing, firm size, and financial risk. Additionally, we find that ESIs are associated with long-term stock price and operating performance. Overall, our findings clarify the potential economic benefits of corporate ESIs and encourage buying firms to take these initiatives selectively according to business contexts.

To reinforce competitiveness, companies must focus on competitive priorities including cost, quality, delivery, and flexibility. The competitiveness also depends on the adherence to environmental requirements and the ability of companies to survive unforeseen disruptions. Lean, agile, resilient, and green (LARG) paradigm is a hybrid supply chain paradigm, which can enhance competitiveness in today's complex markets. In this article, we propose a new conceptual decision-making model to evaluate LARG supply chain performance in medical equipment companies. In this regard, supply chain operations reference model attributes were utilized as performance evaluation criteria. Furthermore, the appropriate practices of LARG supply chain are selected through fuzzy Delphi method. Also, an extension of decision making trial and evaluation laboratory-based analytic network process method is proposed to uncover network relationships and obtain the weights for dimensions and elements. According to the results, the agile paradigm, responsiveness, and quick introduction of new products are determined as the most prioritized elements in their corresponding dimensions, which emphasize the importance of the customer satisfaction. Finally, the extended hesitant fuzzy linguistic VIKOR (Vlsekriterijumska Optimizacija I Kompromisno Resenje) is applied to rank LARG performance of Iranian needles and syringes companies via qualitative group decision-making process. The results of this study are conformed to conventional selection results of needles and syringes suppliers conducted by Iran's Ministry of Health.

Interorganizational fraud, or fraud that occurs between organizations, is a critical component of supply chain fraud and supply chain relational risk, yet empirical evidence on the scale of interorganizational fraud and its antecedents remains scant. Despite its hidden nature, interorganizational fraud can have major implications for supply chain performance. Based on the theories of transaction cost economics, agency theory, and the fraud triangle, widely used in accounting and auditing research, five potential antecedents of supply chain fraud are considered and compared with reported losses due to interorganizational fraud. The data collected via a survey questionnaire with a sample of 151 supply chain employees in manufacturing demonstrate that informants estimated median losses due to interorganizational fraud to be 9% of their firm's total revenue. The most common types of fraud reported include product quality fraud, pricing/invoicing fraud, and corruption. Using a two-step generalized method of moments technique for estimation, the results found that transactional complexity, competitive pressures facing the supply chain, and weak firm ties were significantly related to interorganizational fraud, and that supply chain monitoring and ethical sourcing were not significantly related to interorganizational fraud. These findings contribute to the research on relational risk, supply chain risk management, and opportunism.

Product failure resulting from sourcing supplier’s defective component has compelled a brand owner to enhance quality management, especially when the supplier has informational advantage. In this article, we examine a brand owner’s problem of screening a certain supplier’s inherent quality level with an attempt to induce supply chain partners’ quality efforts using the warranty contract based on information acquired from inspection technology. A supplier’s inherent quality level is herein determined by the private information held by the supplier and is typically characterized as an uncertain variable. The optimal warranty contracts and the expected profits of the brand owner and the supplier are derived from four different scenarios under the framework of uncertainty theory and principal–agent theory. We find that under the condition of pure double moral hazard or pure adverse selection, the first-best outcomes can be achieved without incurring agency cost under the designed contract. However, double moral hazard combined with adverse selection often leads to underinvestment in quality efforts as the supplier can shirk by misreporting her type. Consequently, we present the menu of warranty contracts to screen the supplier’s private information. Finally, we provide empirical managerial recommendations on mitigating potential adverse impacts caused by information asymmetry, supported with numerical investigations.

In order to investigate supply chain coordination and decision under customer balking and stochastic demand, the article considers a two-echelon supply chain consisting of one manufacturer with risk-neutral and one retailer with risk-neutral and develops two models in a centralized and a decentralized system and the three contracts are designed to coordinate supply chain and the optimal price and customer balking strategies are obtained. The results show that the revenue and cost-sharing contract can coordinate supply chain under customer balking and price-dependent demand and achieve the Pareto-improvement; the expected sales quantity and expected reduced sales quantity are influenced conversely by the threshold of inventory and probability of a sale under customer balking. In addition, numerical analysis is given to verify the effectiveness of revenue and cost-sharing contract and the paper gives some managerial insights and puts forward to the future work at last.

In the early onset of the COVID-19 pandemic in the U.S., consumers experienced surprising shortages of essential goods such as toilet paper, yeast and flour, and some of their favorite meat cuts that appeared to be unrelated to the pandemic at first look. The “usual” explanations attributing these shortages to “demand spikes” (e.g., foreign suppliers, trade wars and tariffs, and “hoarding behavior” of panicked consumers) often failed to explain them, and in the best of cases, predicted only temporary shortages. However, shortages in these supply chains ended up being in many cases real “supply chain struggles,” with their true causes going beyond the “usual” ones, and revealing a set of deeper and “unusual causes.” Our detailed analysis of the affected supply chains identifies these overlooked failure factors and hidden causes. Our underestimated causes include demand shifts among market segments, siloed demand planning, bottlenecks in shared resources such as transportation and distribution, and supply chain structures driven by the economics of an efficiency era that failed in a risk-fraught environment. We conclude on the profound lessons learned from the pandemic crisis on supply chains, and the implied challenges to address for building resilient supply chains for the future. The resilient supply chains of the future require rethinking the relevant “systems” we plan and optimize (e.g., firm, industry, region, global factor resources, etc.). The usual answer of building firm-specific redundancy of assets and operational flexibility might be prohibitive in the level of investment required for any one firm, or their financial stakeholders, to pursue and accept.

During the past decade, the demand for biofuel has rapidly increased because of fossil fuel scarcity and pollution, which has resulted in the accelerating commercialization of the global biofuel markets with a potential 500 exajoules per year by 2050. This paper evaluates the economic benefits of five biomass types and proposes a stochastic programming model for the optimal design of the global biodiesel supply chain under the demand and price uncertainty. The biomass is produced in Southeast Asia and oil is extracted. Then, the vegetable oil is shipped to Europe and North America for biodiesel conversion and fulfilling the local demand. The results show that palm tree is a cost-effective clean energy with high benefits and low-carbon emissions. Based on the economic evaluation of biomass, the optimal capital investment, allocation of cultivated area, and transportation paths are identified to maximize the expected global profit in this supply chain in 2008–2012 by the proposed supply chain optimization model.

BACKGROUND: Digitalization has transformed the modes of work, communication and collaboration in the workplace, which is a challenge for all organizations, requiring the adaptation of structures, strategies, leadership and management culture. In the study, it is proposed to consider management culture as a potential factor that determines the competitive management of the network structure of supply chains. Despite numerous studies dedicated to supply chains digitalization, there’s lack of researches dedicated to deep investigation of management culture transformation in context of the digitalization of supply chains requires. OBJECTIVE: The purpose of the study is to identify the determinants contributing to the transformation of management culture in context of supply chain digitalization. METHODS: The study is conceptual research that links management culture and the supply chain. Based on the evolutionary dynamism of the theory and practice of management culture, two aspects of culture have been identified: national psychology (subjective beliefs) and company potential (values and behaviour of personnel). RESULTS: It is assumed that the most effective culture in context of supply chain digitalization is digital culture as it is focused on the external environment. It has been found that the key determinants of the change are the values and behaviour of the personnel, and as a result, they create an effective approach to the management culture transformation. CONCLUSIONS: The results of the study allow managers to assess the established organizational culture that facilitates or hinders the activities of the business in order to successfully implement and achieve the goals set. The results of this study can be applied by top managers of companies facing digitalization of supply chains in developing HR and managerial policies and programs.

Rebate policies are widely used by manufacturers to stimulate sales. This paper analyzes a supply chain with revenue sharing and wholesale price contracts under manufacturer rebate policy, where the stochastic multiplicative demand function depends on both retail price and manufacturer rebate. We identify Stackelberg equilibrium for the supply chain under each contract. It is our finding that under the manufacturer’s respective optimal decisions for revenue sharing and wholesale price contracts with rebates, the retailer’s optimal retail prices are the same. We recognize sufficient conditions under which a revenue sharing contract and a wholesale price contract with rebate can achieve Pareto improvement, i.e., both the manufacturer and the retailer obtain a greater expected profit, compared with the cases without rebate. A sufficient condition is found, under which a revenue sharing contract with rebate policy can achieve Kaldor–Hicks improvement, i.e., yielding a greater expected profit for the manufacturer, a lower expected profit for the retailer, and a greater expected total profit, over pure revenue sharing contract without rebate. Further, it is shown that with rebate, a revenue sharing contract can achieve Kaldor–Hicks improvement over a wholesale price contract. Finally, our findings are demonstrated using numerical studies.

Motivated by the commonly observed commercial used apparel collection (UAC) programs in fashion retail supply chain operations, this paper analytically explores the associated operational challenges that firms face. First, in the basic model, we consider the case when a fashion retail brand promotes its UAC program and collects the used apparel from consumers. Depending on the conditions of the collected apparel products, the fashion retail brand will classify and either donate them for charity or send them to remanufacturing. For either case, the fashion retail brand gains a benefit. We analytically derive in closed-form the optimal promotion effort and study the mechanism for “profit” coordination. Our results indicate that many traditional supply chain contracts fail to achieve “profit” coordination. Thus, the effort cost sharing (ECS) contract is proposed and proven to be effective for “profit” coordination. Finally, to check the robustness of findings from the basic model, we examine various UAC practice related extended models, such as i) consumer coupon offering, ii) “no remanufacturing” model, iii) consumer heterogeneity in environmental consciousness, iv) own-brand collection vs any-brand collection. Our findings show that the qualitative insights continue to hold in the extended scenarios. Some novel scenario-dependent findings are also obtained. Insights derived in this paper not only contribute to the literature but also provide scientifically sound managerial guidance and insights to practitioners on how UAC programs can be best operated.

We investigate a firm’s information acquisition and voluntary disclosure decisions regarding demand forecast information. We study the interaction among the firm, its supplier, and the external capital market investors who assess the firm’s interim equity price. We first analyze when it is beneficial for the firm to acquire demand forecast information, and if such information is acquired, when the firm should disclose it to the supplier and investors. Then, we investigate how the firm’s information acquisition and disclosure decisions influence the investors’ and the supplier’s pricing strategies. We show that the optimal information disclosure policy for the firm is highly dependent on the corporate myopia level (CML): when the CML is low, the firm discloses low demand information only; when the CML is medium, the firm always withholds demand information; and when the CML is high, the firm discloses high demand information only. Our findings provide a novel plausible explanation to firms’ non-disclosure behaviors commonly observed in practice and highlight the importance of considering the interaction between the supply chain and the capital market.

Problem definition: Fast recovery from sourcing interruptions is a key objective for global supply chains and for business continuity professionals. In this paper, we study the impact of different supply chain strategies—supplier diversification and the use of long-term relationships—on the ability of a supply chain to recover from sourcing interruptions. Academic/practical relevance: Improving supply chains’ recovery ability has been an important focus area for both practitioners and academics. Collectively, available anecdotal evidence and theoretical analyses provide ambiguous recommendations driven by competing effects of different sourcing strategies. Our paper provides the first rigorous and large-scale empirical evidence relating the use of different supply chain strategies to the ability of a supply chain to recover from supply interruptions. Methodology: We develop a compound estimator of a supply chain’s recovery rate that can be constructed using limited available data (only the time series of firms’ actual sourcing behavior). Using more than two and half million import manifests, we extract firms’ maritime sourcing transactions and use this data to estimate recovery rates of different firm-category supply chains of publicly traded U.S. firms. Results: We find that supplier diversification is associated with slower recovery from sourcing interruptions, whereas the use of long-term relationships is associated with faster recovery. A one standard deviation decrease in the former is associated with a 16% faster recovery, and a like increase in the latter is associated with a 20% faster recovery. Managerial implications: Our paper brings important empirical evidence to the hitherto theoretical debate on the impact of sourcing strategies on faster recovery in supply chains. We therefore provide actionable advice on supply chain design for faster recovery.

Influenza vaccine supply chains are subject to yield and demand uncertainty, which leads to the mismatch between supply and demand. This paper studies the production and procurement decisions in the influenza vaccine supply chain consisting of a manufacturer facing uncertain production yield and a social planner who faces uncertain demand and is responsible for social infection costs. We develop a novel model framework considering the risks resulting from uncertainties on both supply and demand sides that the manufacturer may delay part of delivery and the social planner may order under or over demand. Based on the framework, we first discuss the production and procurement decision-making problem in a centralized and a decentralized system. By comparing the two systems, we present the existence and extent of the inefficiency in the influenza vaccine supply chain. Further, we propose a procurement strategy that provides the social planner with two ordering opportunities and explore the conditions under which the two members would be willing to accept the strategy. The results show that such a strategy is effective on improving the influenza vaccine supply chain coordination. Additionally, considering large-scale outbreaks of influenza epidemics, we extend the models with a piecewise linear infection probability function to those with a generic one and describe the characteristics of the extended models and their solutions.

Improved supply chain optimization strategies can play a major role in addressing global food security and safety in years to come. In particular, tighter safety regulations, changing consumer quality requirements and more stringent market competition call upon integrated supply chain decision-making frameworks that explicitly consider product quality control. This effort requires metrics of quality that accurately reflect product physico-chemical properties, as well as consumer purchasing preferences. However, a critical challenge linked to embedding the complex dynamics of the evolution of product quality in time within supply chain models is the large-scale nature of the ensuing optimization problems, which are computationally intractable even for moderate-size, single-item systems. In the present work, we introduce a computationally efficient optimal production and distribution planning framework for perishable products having multiple quality attributes that evolve in time as a function of environmental conditions during shipment and storage. We also propose a model reduction strategy and a decomposition framework that enhance the scalability of our approach. We perform extensive numerical simulations using different network instances to validate our theoretical findings, as well as to demonstrate the advantages of the proposed supply chain management scheme.

We study a buyer’s problem of auditing suppliers within an existing network to ensure social responsibility compliance. The buyer suffers economic damages if a violation at a supplier is exposed (whether by the media, regulator, or nongovernmental organization). To avoid damages, the buyer may audit the network to identify noncompliance. If a supplier fails an audit, the buyer must take one of two costly actions: either rectify the supplier or drop the supplier (along with any dependent suppliers). Dropping a supplier changes the network topology, reducing competition and thereby increasing the buyer’s input cost arising from an equilibrium. We show that the buyer’s optimal dynamic auditing policy has two subphases: the buyer will first audit and drop some suppliers before either auditing and rectifying all remaining suppliers or halting auditing altogether. By halting, the buyer tolerates some noncompliance in the network (“see no evil, hear no evil”). Within the audit-and-drop subphase, when auditing only in the upper tier, the buyer always audits a least valuable unaudited supplier, yielding greater balance in the network. When the buyer audits both tiers, it might choose a supplier other than the least valuable. The buyer may choose a supplier in a pivotal position to help ascertain the viability of a portion of the network (“litmus test”). In extensions, we find that when violations in tier 1 carry a higher penalty for the buyer, the buyer may audit and rectify only tier 1 suppliers; when audits may be inaccurate, the buyer more likely tolerates a greater level of noncompliance. This paper was accepted by Charles Corbett, operations management.

This study investigates the role of a credit guarantee company and a peer-to-peer (P2P) lending platform in the financing business of a capital-constrained retailer who faces uncertain demand over a single period. The credit guarantee company is divided into two types: conservative and adventurous. The conservative credit guarantee company aims to earn a certain expected return by setting its guarantee service fee rate, whereas the adventurous one sets the guarantee service fee rate to maximize its profit while ignoring the expected return. In a decentralized financing system, the guarantee types will influence all local optimal decision variables in Stackelberg equilibrium, and the optimal order quantity setting under the adventurous credit guarantee type is more flexible than that under the conservative one. We then analyze the centralized financing system and prerequisites for participation to obtain the supply chain financing (SCF) coordinating strategy. Under the adventurous credit guarantee, the P2P lending platform financing system can achieve SCF coordination, but under the conservative credit guarantee, SCF coordination cannot be achieved. When a credit guarantee company is adventurous and the coordination condition on order quantity is satisfied, the information service fee rate linearly decreases in the guarantee service fee rate, and the P2P lending platform’s and the credit guarantee company’s expected profits have different monotonic properties with the information service fee rate (or the guarantee service fee rate) increasing. Finally, we identify the boundary of the retailer’s initial working capital and the suitable ranges of the service fee rates to achieve SCF coordination.

With the development of e-commerce, manufacturers now have the opportunity to compete with existing retail channels by introducing their direct channels. Encroachment weakens the strength of retail channels, which may affect the manufacturer's decision on whether to provide trade credit financing to retailers. This study investigates the strategic interaction between manufacturer's encroachment and retailers’ financing choices (trade credit financing or external financing) in a supply chain consisting of a manufacturer and two capital-constrained retailers. We find that only encroachment cost below a certain threshold will make the manufacturer encroach on the market, while manufacturer encroachment is harmful to capital-constrained retailers. Surprisingly, these retailers can expand the ratios of equity financing in anticipation of manufacturer encroachment, which is a new strategic role of equity financing. In addition, the more intense the channel competition (the larger the credit gap between the two retailers) is, the less (more) likely the manufacturer will be to encroach. Further, we find that retailers prefer trade credit (external) financing at a low (high) bank loan interest rate in a non-encroachment scenario, while they prefer external financing in an encroachment scenario. However, the manufacturer always prefers the case that both retailers choosing external financing. Finally, there are financing choice conflicts between the manufacturer and retailers in the non-encroachment scenario. A high-credit retailer choosing trade credit financing may make all members achieve a Pareto improvement when the credit gap between two retailers is large; otherwise, both retailers choosing external financing is a Pareto improvement.

Coopetition is a business phenomenon that dominates many supply chains. We aim to understand why and how coopetition occurs in supply chains with the presence of process improvement in upstream component production. An original equipment manufacturer (OEM) can purchase the component from either a non-competing supplier (NS) or a competing supplier (CS) that also sells substitutable products in the end consumer market. We demonstrate that without process improvement, coopetition does not exist, because the OEM prefers sourcing from the NS, even though the CS is willing to sell the component to the OEM. Two cases are considered in which process improvement is present: supplier-initiated investment, where the suppliers conduct self-investment, and OEM-initiated investment, where the OEM invests in the supplier's process. We find that with supplier-initiated investment, the CS always prefers coopetition, but the OEM may not. When the investment is efficient, coopetition occurs as an equilibrium outcome; otherwise, competition occurs. The cause of coopetition equilibrium comes from variable process improvement incentives of the CS that derive from two driving forces: the vertical wholesale price effect and the horizontal quantity competition effect. When the degree of product substitution is low, the CS increases its investment and lowers its wholesale price, benefiting the OEM. When the degree of product substitution is high, the CS reduces its investment as well as production quantity, which also benefits the OEM. Interestingly, with OEM-initiated investment, the CS might not always choose to sell the component to the OEM, and as a result, coopetition never occurs.

Problem definition: We study supply chain coordination in a setting with transshipment. We use centralized and decentralized transfer prices as a way to increase supply chain coordination. Academic/practical relevance: The ability to transship can improve channel efficiency by improving the match between supply and demand. We study how human decision makers behave in this setting and provide clear insights to improve coordination. Methodology: We use controlled laboratory experiments with financially incentivized human subjects. We study a broad set of critical ratios under both decentralized and centralized transfer-price settings. In the decentralized transfer-price setting, retailers negotiate a transfer price. In the centralized transfer-price setting, we use two different approaches: theoretical and behavioral transfer price. Both approaches suggest opposite recommendations. Results: Analytically, the optimal transfer price should depend on the critical ratio; but results from the decentralized setting show that participants set prices as if they ignore the critical ratio and instead focus on splitting potential profit from transshipped units in half. However, there is a positive relationship between transfer prices and ordering decisions. Moreover, generalizing the pull-to-center effect, we find that subjects do not place orders that coordinate the supply chain. For the centralized setting, we find that using the theoretical approach does not coordinate ordering decisions and does not improve decisions compared with the decentralized setting. The behavioral approach suggests a transfer price close to product selling price for a high critical ratio and a transfer price below product cost for a low critical ratio. These recommendations lead to coordinating ordering decisions. Managerial implications: We draw two practical conclusions from our research. First, transshipments are unambiguously beneficial, resulting in higher profitability, and, when feasible, should be encouraged. Second, when possible, transfer prices should be set centrally but taking into account subjects’ behavior. Otherwise, price negotiation might lead to better performance.

We construct a sample of over 200,000 supply chains between 2003 and 2018 to conduct a chain-based analysis of trade credit. Our study uncovers novel stylized facts about trade credit both within and across supply chains. More upstream firms borrow more from suppliers, lend more to customers, and hold more net trade credit. This upstreamness effect in trade credit is weaker for more profitable firms and for longer chains. Firms in more central or more profitable chains provide more net trade credit. Our results are generally consistent with the recursive moral hazard theory of trade credit. Evidence for the financing advantage theory is mixed.

Problem definition: The beer game is widely used in supply chain management classes to demonstrate the bullwhip effect and the importance of supply chain coordination. The game is a decentralized, multiagent, cooperative problem that can be modeled as a serial supply chain network in which agents choose order quantities while cooperatively attempting to minimize the network’s total cost, although each agent only observes local information. Academic/practical relevance: Under some conditions, a base-stock replenishment policy is optimal. However, in a decentralized supply chain in which some agents act irrationally, there is no known optimal policy for an agent wishing to act optimally. Methodology: We propose a deep reinforcement learning (RL) algorithm to play the beer game. Our algorithm makes no assumptions about costs or other settings. As with any deep RL algorithm, training is computationally intensive, but once trained, the algorithm executes in real time. We propose a transfer-learning approach so that training performed for one agent can be adapted quickly for other agents and settings. Results: When playing with teammates who follow a base-stock policy, our algorithm obtains near-optimal order quantities. More important, it performs significantly better than a base-stock policy when other agents use a more realistic model of human ordering behavior. We observe similar results using a real-world data set. Sensitivity analysis shows that a trained model is robust to changes in the cost coefficients. Finally, applying transfer learning reduces the training time by one order of magnitude. Managerial implications: This paper shows how artificial intelligence can be applied to inventory optimization. Our approach can be extended to other supply chain optimization problems, especially those in which supply chain partners act in irrational or unpredictable ways. Our RL agent has been integrated into a new online beer game, which has been played more than 17,000 times by more than 4,000 people.

Problem definition: Operational disruptions can impact a firm’s risk, which manifests in a host of operational issues, including a higher holding cost for inventory, a higher financing cost for capacity expansion, and a higher perception of the firm’s risk among its supply chain partners. Academic/practical relevance: Although disruptions have been studied extensively in the operations management literature, the emphasis has been on mitigating the deleterious impact on the firm’s production potential rather than its risk. We examine whether implementing and credibly attesting to having effective internal control systems will meaningfully influence the impact of operational disruptions on the firm’s risk and market valuation. Methodology: We exploit a 2004 regulatory change that required certain firms to attest to having control systems in place. Our triple-difference regression specification takes advantage of a regulatory anomaly that excluded a well-defined set of firms from complying with the control system requirement. Results: We find that firms that were obligated to comply with this regulatory requirement experienced a materially smaller increase in their risk and a smaller decrease in their market value in the aftermath of an operational disruption. Firms that were not obligated to comply with this requirement did not experience such benefits in the aftermath of a disruption and instead, experienced a larger increase in their risk. Managerial implications: Fostering a better understanding of whether credible control systems can reduce the impact of disruptions on the firm’s risk and value is important as it identifies a broader set of mitigation strategies available to operations managers. This can help managers achieve a better fit between their risk mitigation initiatives and their objectives and budget constraints.

Problem definition: This paper investigates how counterfeits influence a global supply chain and how the supply chain should effectively take anticounterfeit actions. Academic/practical relevance: The impacts of counterfeiting have been increasingly profound on global supply chains. It is critical to understand how counterfeiting impacts supply chains when supply chain members act in their own interests, and how supply chains can effectively combat counterfeiting when all the members can contribute to it. This is the first paper that offers insights into these important questions. In particular, we examine who among the supply chain members is in the best position to perform counteracting activities, how these members can cooperate in anticounterfeiting, and what economic implications the anticounterfeit actions have to the supply chain, individual firms, consumer surplus, and social welfare. Methodology: We consider a supply chain consisting of a manufacturer and a retailer, and analyze a game-theoretical framework to derive the equilibrium. Results: The manufacturer prefers to induce the retailer to combat counterfeits rather than to combat itself. Contrary to conventional wisdom, counterfeits can increase the supply chain’s profit even in the absence of network externality effects. The crux is that the manufacturer lowers wholesale price to incentivize the retailer’s counteraction and, consequently, the threat of counterfeits can mitigate double marginalization and benefit the supply chain. Managerial implications: Our results demonstrate that a sustainability risk can trigger collaborative endeavors of supply chain members and thus be advantageous to the supply chain. The findings also underscore the important role that retailers should play in anticounterfeiting. Particularly, it can be in the supply chain’s interest that the manufacturer does not execute the counteraction, either jointly with the retailer or by itself.

Problem definition: To improve the poor performance of supply chains caused by misaligned incentives under the wholesale price contract, theory proposes coordinating contracts. However, a common finding of experimental studies testing such contracts is that they tend to yield only a marginal, if any, performance improvement over wholesale pricing. These studies identify several behavioral factors that are at play but none accounted for by the theory proposing coordinating contracts. Among them, identified as the single most detrimental for the supply chain performance, is incomplete information about preferences for fairness causing contract rejections. Can the supply chain performance be improved with a contract designed allowing for this type of information asymmetry? What does this contract (mechanism) look like? Academic/practical relevance: The extant research characterized the optimal contracting mechanisms for such important practical cases as the suppliers’ private information about production cost or the retailers’ private information about the end customer demand. The present study addresses the gap in another important practical case: when the source of information asymmetry is the private information about preferences for fairness. Methodology: The underlying research method is mechanism design. Results: We prove that the optimal mechanism consists of a single contract positioned on the Pareto frontier and characterize the optimal profit split between the supplier and the retailer. We show that, under a wide range of preferences for fairness, the efficiency loss because of private information is strictly positive, but exceptions are possible. We also show that the optimal mechanism can be implemented with a variety of commonly used in practice and widely studied in academic literature contracts, including the minimum order quantity and the two-part tariff ones. Managerial implications: We establish a direct link between a large volume of theoretical and empirical literature on social preferences with the research on supply chain contracts. Because rejections that are because of incomplete information are an important cause of contract inefficiency observed in the laboratory, managers should avoid take it or leave it offers when they negotiate contracts. Instead, the bargaining process should be geared toward discovering the extent of the fairness preferences of the contracting parties.

Problem definition: The U.S. influenza (flu) vaccine supply chain is decentralized and experiences frequent supply and demand mismatches caused by two key factors: (1) the vaccine production process (yield) is highly uncertain; and (2) individuals are self-interested and do not completely take into account positive and negative externalities that they impose on others. To improve matching of supply and demand, we counteract these factors by developing an ex ante budget-neutral incentive program. Academic/practical relevance: We establish the sources of inefficiency in the flu vaccine supply chain. To eliminate the inefficiency, we develop a two-sided incentive program that policymakers can implement to finance vaccines under an ex ante balanced budget. Methodology: We model the flu vaccine supply chain as a decentralized system consisting of self-interested individuals on the demand side, and a profit-maximizing manufacturer with uncertain yield on the supply side. We use backward induction to characterize the subgame-perfect equilibrium of the sequential game that models the interactions between individuals and the manufacturer. Results: We develop a two-sided incentive program that proposes “vaccination incentives” to be given to individuals on the demand side, and “a menu of transfer payments” between the social planner and manufacturer on the supply side. When the realized vaccine supply is high (or low), our incentive program provides positive (negative) vaccination incentives for individuals to stimulate (or curb) the demand and eliminate positive (or negative) externalities by making vaccination more affordable (or costly). When social benefits from vaccination are significantly high, our incentive program uses a menu of transfer payments to penalize (or subsidize) the manufacturer for low (or high) yield realizations so that it produces the socially optimal quantity. We show that our incentive program can attain the social optimum, maintain an ex ante balanced budget (i.e., budget-neutral in expectation), and distribute the maximum social welfare between individuals and the manufacturer arbitrarily. Managerial implications: Vaccination incentives to individuals can ensure their access to the vaccine, but they are not enough to entice the manufacturer to ensure vaccine availability. A menu of contracts contingent on realized yield provides necessary incentives to the manufacturer and assures the availability.

Channel intermediaries (hereafter, intermediaries) are among the most critical elements of any supply chain as the bulk of manufacturing output is transported through them. However, we have a limited understanding of the approach a manufacturer should take to achieve the dual goal of increasing profitability and intermediary satisfaction. To provide manufacturers with practical strategies to boost their performance and their intermediaries’ satisfaction, we rely on three related studies. In Study 1, through interviews with managers and intermediaries, we find that distribution alignment across intermediary, market, and product types may be a practical strategy for both manufacturers and intermediaries. In Study 2, by using a robust empirical methodology with data from a construction product manufacturer operating in an emerging market, we find that various combinations of intermediary, market, and product types affect the manufacturer’s performance differently. Accordingly, through a supply-side examination, we quantify the revenue impact of reallocating the studied manufacturer’s retail distribution resources among different intermediary-, market-, and product-type combinations. In Study 3, through a field implementation, we find that our recommended intermediary alignment strategy from Study 2 substantially boosts both the manufacturer’s performance (by fourteen percent in revenue and thirteen percent in profit) and intermediaries’ satisfaction (by 7.71%). Thus, with our qualitative, empirical, and field studies, we contribute to the existing research in channel management, emerging market retailing, retail distribution, and marketing strategy.

In modern manufacturing operations, green technologies are becoming increasingly popular. Meanwhile, trade-in programs are widely implemented to boost sales and enhance product recycling, which would benefit the environment. It is widely observed that many companies implement the green technology (GT) and trade-in program together. However, whether this act is always beneficial to the environment is unclear. We hence build analytical models to address this issue. To conduct a comprehensive study, we follow the real-world practices and examine both the retailer collects (R-collect) and manufacturer collects (M-collect) scenarios in a supply chain. Our results show that the “R-collect scheme with GT” leads to the highest levels of supply chain profit and social welfare but more emissions may be generated. Besides, implementing GT does not always benefit the environment in both R-collect and M-collect schemes. Considering from the environment perspective, we interestingly show that governments should advocate the “M-collect with GT” and “R-collect without GT” schemes. Correspondingly, to motivate both the supply chain and consumers to accept the advocated strategies, we characterize the carbon tax and subsidy based “carrot-and-stick” policy. We further show in the extended analyses that our main results hold under competition, when the emission abatement cost takes different analytical forms, and when consumers are environmentally conscious.

Much attention has been focused on supplier selection in operations. There has been less research on the supplier selecting buyers in a two-echelon supplier-buyer chain, which we study for downstream taxicab vehicle fleets. We consider the problem of pricing infrastructure services by an electric vehicles (EVs) service provider (SP), which determines the group of taxicab companies (TCs) that will adopt EVs. We study SP’s pricing decisions in a decentralized supply chain under a general infrastructure cost function, multiple TCs, and symmetric information. We extend the modeling to the case with (i) endogenous demand and EV-taxicab end-consumer pricing and (ii) asymmetric information between SP and TC. We analyze the factors that influence SP’s profits and the set of participating TCs who adopt EVs. We find that when the fleet size of TCs increases, SP prefers to serve more low-mile TCs than the high-mile TCs and even removes some high-mile TCs in exchange for low-mile TCs, where low and high-miles correspond to average miles driven in a time period (shift). When the coefficient of variation of miles driven increases, SP prefers to serve more high-mile TCs than the low-mile TCs. In general, the set of TCs that adopt EVs cannot be simply characterized using inputs such as average miles driven by different TCs. This study provides a modeling framework and managerial implications for TC selection and pricing contracts by an EV infrastructure service provider.

Purpose Amidst burgeoning attention for global value chains (GVCs) in international business (IB), this paper aims to identify a clear “missing link” in this literature and discusses implications for research and corporate social responsibility (CSR) policy-making and implementation. Design/methodology/approach The paper combines an overview of relevant literature from different (sub)disciplinary fields, with insights from practitioner and expert interviews and secondary data. Findings Because IB GVC research stems from a focus on lead firms and their producing suppliers, it lacks attention for intermediary actors that may significantly impact the organization of production in general, and firms’ CSR commitments in particular. Import intermediaries are often “hidden” in GVCs. This paper indicates the emergence of GVC parallelism with “frontstage” chains managed by lead firms and increasingly exposed to public scrutiny following calls for transparency and CSR, and “backstage” ones in which buyers and intermediaries operate more opaquely. Practical implications This study points at salient yet little known practices and actors that influence the organization of production and the implementation of CSR policies in various ways, and therefore offers ground for reflection on the design of proper supply chain and CSR policies. Originality/value This study exposes a hitherto neglected category of actors in GVCs and broader IB research and discusses implications, relevance and areas for further investigation. An illustrative example explicates the importance of carefully considering this “missing link”. The study emphasizes the need for further study into ways in which both lead firms and intermediaries deal with contradicting demands of implementing CSR policies and offering competitive prices with short lead times.

The shared supply chain model has provided new ideas for solving contradictions between supply and demand for large-scale standardized production by manufacturers and personalized demands of consumers. On the basis of a platform network effect perspective, this study constructs an evolutionary game model of value co-creation behavior for a shared supply chain platform and manufacturers, analyzes their evolutionary stable strategies, and uses numerical simulation analysis to further verify the model. The results revealed that the boundary condition for manufacturers to participate in value co-creation on a shared supply chain platform is that the net production cost of the manufacturers’ participation in the platform value co-creation must be less than that of nonparticipation. In addition, the boundary condition for the shared supply chain platform to actively participate in value co-creation is that the cost of the shared supply chain platform for active participation in value co-creation must be less than that of passive participation. Moreover, value co-creation behavior on the shared supply chain platform is a dynamic game interaction process between players with different benefit perceptions. Finally, the costs and benefits generated by the network effect can affect value co-creation on shared supply chain platforms.

Currently, increasingly more retailers wish to gain a competitive advantage through vertical integration. We consider a three-echelon supply chain comprising a retailer, a service supplier, and a manufacturer. The service supplier is responsible for the service level, and the manufacturer is responsible for product quality. The retailer has two business modes: reseller mode and platform mode. The retailer chooses one of three strategies, i.e., no vertical integration, forward integration, or backward integration, for these two business modes. By comparing the retailer's equilibrium profit under these vertical integration strategies, we obtain the optimal choice for the retailer and a high profit for the supply chain under different business modes. Moreover, we characterize the effects of the proportional fee, product quality, service level and business mode on vertical integration. We find that the cost effect is determined by product quality and service level and that the income distribution effect is determined by the proportional fee. The cost effect is a key factor affecting the retailer's vertical integration strategy under the reseller mode, and both of these effects jointly affect the retailer's choice under the platform mode. Furthermore, we design a cost-sharing contract to improve vertical integration efficiency and investigate the effect of vertical integration decisions on improvement strategies. Lastly, we consider an extension to analyse the effect of an endogenous proportional fee on retailers' vertical integration strategies.

The literature on closed loop supply chains (CLSCs) has ignored advantageous inequality aversion while modelling the fairness concern of channel partners and demonstrated that coordinating a decentralised channel requires complex price contracts. In this paper, we show that a constant wholesale price contract can coordinate a decentralised channel in a manufacturer-led CLSC if the retailer's advantageous inequality aversion is sufficiently strong. The result is valid for a range of equitable shares of the channel profit, such that the allocated share of the manufacturer is larger than that of the retailer, and the retailer's share is greater than a minimum threshold. Used product collection rate and channel profit are higher when the retailer is inequality averse compared to when she is a profit maximiser. The results are independent of whether the end-of-use products are collected by the manufacturer or the retailer. We also show that the collection rate is higher, and both channel partners are better-off, under the manufacturer collection model. To obtain these results, we solve multistage sequential move games under the two collection models. We apply Karush–Kuhn–Tucker conditions for constrained optimisation, to determine the boundaries for the existence of the subgame perfect Nash equilibrium.

Problem definition: The lessons learned over decades of supply chain management provide an opportunity for stakeholders in complex systems, such as healthcare, to understand, evaluate, and improve their complicated and often inefficient ecosystems. Academic/practical relevance: The complexity in managing healthcare supply chains offers opportunities for important and impactful research avenues in key supply chain management areas such as coordination and integration (e.g., new care models), mass customization (e.g., the rise in precision medicine), and incentives (e.g., emerging reimbursement schemes), which might, in turn, provide insights relevant to traditional supply chains. We also put forward new perspectives for practice and possible research directions for the supply chain management community. Methodology: We provide a primer on supply chain thinking in healthcare, with a focus on healthcare delivery, by following a framework that is customer focused, systems based, and strategically orientated and that simultaneously considers clinical, operational, and financial dimensions. Our goal is to offer an understanding of how concepts and strategies in supply chain management can be applied and tailored to healthcare by considering the sector’s unique challenges and opportunities. Results: After identifying key healthcare stakeholders and their interactions, we discuss the main challenges facing healthcare services from a supply chain perspective and provide examples of how various supply chain strategies are being and can be used in healthcare. Managerial implications: By using supply chain thinking, healthcare organizations can decrease costs and improve the quality of care by uncovering, quantifying, and addressing inefficiencies.

A consignment stock (CS) policy is a promising supply chain coordination mechanism. Delay-in-payments is a financing arrangement that facilitates purchases and increases sales by postposing a payment to some future time. It lowers costs and increases profitability, somewhat like what CS does. A study in the literature shows that combing the two reaps more benefits by considering different lot sizing and payment scenarios. Buy now, pay later, technically delay-in-payments, is a business practice for increasing sales. This paper revisits that work by assuming demand increases with the length of the delay period. This increases sales and, subsequently, profits beyond what that study reports.

Non-tariff measures (NTMs) have become a prominent issue in trade negotiations, especially in agriculture. For trade negotiations between the EU and U.S., beef has emerged as an important topic. To export to the EU, U.S. producers face a complex series of compliance costs that occur on multiple points along the supply chain. However, the current approach to measuring NTMs does so in an abstract manner; this paper applies a more detailed, supply chain (SC) approach to measure those costs. Our analysis finds that the SC approach comprehensively accounts for the different components of NTM costs and leads to more meaningful implications for interpreting the welfare impacts of removing NTMs.

Problem definition: We conduct a controlled human-subjects experiment in a two-tier supply chain where a supplier’s per-unit production cost may be private information while bargaining with a buyer. Academic/practical relevance: Academically, supply chain studies often assume full-information or highly structured bargaining. We consider private information with dynamic, unstructured bargaining. In practice, a buyer may not know its supplier’s cost exactly and interact with its supplier in a back-and-forth bargaining environment. Thus, understanding how a supplier’s private cost information affects both supply chain outcomes and bargaining is new to the literature and relevant to practice. Methodology: We employ insights from mechanism design to generate restrictions on the space of agreements and solve for a specific bargaining solution under private information to generate precise predictions. These predictions are then tested through a human-subjects experiment. Results: In our experiment, theory predicts that all supplier types should earn at least 50% of total profits when their cost information is private. However, we find that high-cost suppliers earn a disproportionately low share of total profits under private information, 20.16%. We show that this is because buyers, under private information, act as if they are bargaining with the lowest-cost supplier and suppliers do not appear to blame buyers for behaving this way. Based on these findings, we conduct an additional experiment where suppliers have the ability to communicate their private costs to buyers and observe that verifiable disclosure significantly increases profits for high-cost suppliers. Managerial implications: High-cost suppliers actually suffer from having their costs as private information, which runs counter to theory. However, if high-cost suppliers can credibly disclose their costs to buyers, they can significantly increase profits. Lastly, although private information does not lead to more disagreements, negotiations do take longer, which can be costly to firms.

We investigate a three-echelon supply chain in which a distributor at the middle echelon negotiates two wholesale price contracts with his upstream manufacturer and downstream retailer. In the first stage, the distributor decides on whether to first negotiate with the manufacturer or with the retailer; in the second (combined, noncooperative-cooperative, game) stage, the two negotiations are conducted sequentially. We find that the supply chain can be coordinated if the distributor first negotiates with the retailer. The distributor should choose the negotiation sequence for supply chain coordination, if he has a sufficiently large (small) relative bargaining power in the negotiation with the manufacturer (the retailer). We also extend our analysis to the cases in which the distributor and the manufacturer negotiate a buyback or two-part tariff contract, and draw similar outcomes when the distributor first negotiates with the retailer. In addition, under the two-part tariff contract, the distributor prefers to first negotiate with the retailer if the manufacturer has a sufficiently high disagreement payoff whereas, under the buyback contract, the distributor always prefers to first negotiate with the firm with a stronger bargaining power. Moreover, the two-part tariff (buyback) contract cannot (can) always coordinate the supply chain.

Today, many mobile apps (MAs) act as an efficient channel for e-tailers to sell products. In addition to selling, some of these apps even include e-payment functions. This creates e-payment convenience but also a concern on privacy. In this article, we consider a supply chain with an e-tailer which sells through such an MA and an online website. The two channels influence the demand of one another. In the basic model, the e-tailer decides the promotion efforts in both channels. We interestingly find that the optimal promotion efforts are independent of e-payment convenience and privacy concern. We analytically establish that profit-sharing contract and two-part-tariff contract can coordinate the dual channel supply chain system but not revenue-sharing contract or sales rebate contract. In the extended models, we first consider the case when the e-tailer makes product pricing as well as promotion efforts decisions together. We analytically derive the optimal solution and find that the optimal pricing and promotion efforts depend on e-payment convenience and privacy concern. We further extend the analyses to the case when the e-tailer is risk averse and uncover that: 1) when the retail selling price is exogenously given, the optimal promotion efforts between the risk-neutral and risk-averse e-tailers are the same and 2) when the retail selling price is endogenous, the corresponding optimal retail selling prices and promotion efforts between the risk-neutral and risk-averse e-tailers are different. In particular, a higher degree of risk aversion will lead to higher (lower) promotion efforts and a higher (lower) retail selling price if demand volatility is sufficiently large (small).

A growing number of retailers are now moving to omnichannel sales and adopting new technologies to integrate the store and the web to offer customers a seamless shopping experience. We develop a stylized model where a manufacturer distributes products through two separate retailers in two market segments, e.g., online vs. offline. The aim of this study is to investigate the impacts of competing retailers’ omnichannel moves on supply chain performance. Our model combines pricing interactions and channel move strategies from a supply-side perspective. We obtain three main results. First, though it is suitable for the traditional brick-and-mortar retailer to adopt an omnichannel strategy, it may not be always good for the e-tailer. Second, omnichannel retail does not always lead to lower retail prices and enhanced consumer welfare. It may result in a lower price for the offline segment, but for the online segment, a higher price will be charged. Finally, omnichannel retail may not be good for the manufacturer. An equilibrium {Omnichannel, Digital channel only} strategy outcome of the retailers’ channel move game results in a higher demand and more profits for the manufacturer. However, the manufacturer is indeed hurt by the {Omnichannel, Omnichannel} equilibrium. Our study provides useful managerial insights into retailers’ omnichannel moves in a supply chain.

In recent years, managers have increasingly integrated sustainability into their business models. However, they might overestimate the premium that average consumers are willing to pay for the environment. In this paper, we formulate a game-theoretical model that illustrates the impacts of green optimism which refers to managers’ optimistic bias about consumer environmental awareness. We consider a sustainable supply chain in which one manufacturer invests in green product development and sells the green product through one retailer. Each firm within the supply chain is operated by one manager who is either realistic or optimistic. Contrary to conventional wisdom, we find that managers’ optimistic bias might discourage investment in green product development. We also find that green optimism is always detrimental to the upstream manufacturer, but might be beneficial to the downstream retailer. Surprisingly, under certain conditions, green optimism can be detrimental to all stakeholders, i.e., firms in the supply chain, consumers, and the environment. This study suggests an interesting link between supply chain management and human resource management; that is, within a sustainable supply chain those managers who are optimistic about the future of green business might be an obstacle to the success of green business.

Problem definition: We examine the effect of financial cross-ownership—a situation in which a retailer holds stocks in a competitor—on two crucial operational decisions in a supply chain with competing retailers sourcing from a single supplier: information acquisition and production output. Academic/practical relevance: Financial interconnectedness between competing retailers raises fundamental questions regarding the way information is managed in such markets and the way it affects consumer welfare. Thus, in addition to the relevance to operations management scholars, this subject is of potential interest to policy makers and regulators. Although financial cross-ownership has mainly been unchallenged by regulators, the European Commission has recently called for a deeper understanding of the competitive aspects of this investment tool. Methodology: We develop a game-theoretic model, in which we analyze a supply chain comprised of an incumbent retailer holding stocks in an entrant and both retailers source from a mutual supplier. The incumbent can obtain costless demand information, and the supplier decides whether to leak this information if it is available to him or her. Results: We demonstrate that holding stocks in a rival better aligns the incentives of the rival retailers and results in a lower competition level during the production stage. However, financial cross-ownership can also result in an increased incentive for information acquisition, even when the information is later leaked to the entrant. The acquisition of information benefits not only the retailers but can also make the consumers better off. Managerial implications: Our work contributes to the heated policy debate regarding the competitive effects of financial cross-ownership. In addition, we are the first, to the best of our knowledge, to study the way financial cross-ownership affects operational decisions. Specifically, we show that financial cross-ownership provides incentives to acquire demand information even under the threat of information leakage.

Corporate customers are an important stakeholder in global supply chains. We employ several unique international databases to test whether socially responsible corporate customers can infuse similar socially responsible business behavior in suppliers. Our findings suggest a unilateral effect on corporate social responsibility (CSR) only from customers to suppliers, an evidence further supported by exogenous variation in customers’ close-call CSR proposals and by product scandals. Customers exert influence on suppliers’ CSR through positive assortative matching and their decision-making process. Enhanced collaborative CSR efforts help improve operational efficiency and firm valuation of both customers and suppliers but increase only the customers’ future sales growth.