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The authors address a two-dimensional (both customer acquisition and retention) incentive in a decentralized service chain consisting of a risk-neutral brand and agent (or averse). 

The authors focus on the relationship between acquisition and retention, that is, retained customers (repeated purchases) are based on and come from the acquired (new) customers in the former period. The authors also design a two-period separate incentive on both dimensions.

The authors found that a targeted incentive strategy should be applied for achieving more revenue when the incentive intensities are relatively small. Otherwise, the brand needs to adjust the targeted incentive strategy into incentivizing the opposite dimension, particularly on acquisition. Under the optimal contract, the brand needs to be very careful with deciding the fixed part of the incentive salary and the incentive intensities on both dimensions. For example, the fixed salary initially decreases and then increases in the incentive intensities. For the optimal incentive policies, the brand should incentivize acquisition but outsource retention if the agent is risk-neutral. When the agent is becoming risk-averse, the brand should lower its incentive intensity as the risk degree and variances become larger. Interestingly, the brand may benefit from introducing risks.

The study contributes to the literature by considering the following points. First, the authors extend the principal-agent incentive model by considering two-period decisions of customer acquisition and retention. Second, based on the two-period principal-agent problem, the authors design separate incentive intensities on acquisition and retention, respectively. While, most of the literature focused on acquisition incentives. Third, different from other works focusing on either risk-neutral or risk-averse environments, the authors consider both and compare the cases of risk-neutral and risk-averse to analyze the impact of risk on the optimal decisions and the brand's expected profit.

In the new retail era, the supply chain synergy produced by quality integration has become the new direction of service supply chain research. The purpose of this paper is to study how to promote the sustainable development of the retail service supply chain (RSSC) by comparing and analyzing the optimal quality behavior, optimal returns, and the combination of conditions and strategies of the participating members of the RSSC.

From the perspective of quality function development and service quality concern, this paper considers RSSC as a two-level supply chain structure composed of functional service provider and retail service integrator. In this paper, a dynamic optimization model of quality input-cooperation-coordination of RSSC is proposed under two quality cooperation modes of decentralization and integration. This paper adopts the differential game method to compare and analyze the optimal quality behavior, optimal income, forming conditions and strategic combination of the participating members of the RSSC in different situations.

(1) Compared with quality dispersion, quality integration has more significant Pareto improvement effect on quality behavior and optimal revenue of RSSC. (2) In the case of quality integration, the optimal revenue obtained by the service sharing model is generally better than that obtained by the retail alliance collaboration model. (3) Benefit distribution ratio and quality cost allocation determine the optimal quality behavior of participating members of the RSSC, and also become the key factors for participating members to choose the collaborative mode in the case of quality integration.

Based on the quality function development of RSSC, this paper introduces the concept of steady service quality, and discusses the relationship between the quality cooperation stability and the mode selection of RSSC. This provides a theoretical basis for how to build a RSSC with efficient operation and stable quality.

The learning outcomes are as follows: to understand the impact of external factors in supply chain operations planning; to understand the role of quantitative and qualitative data in supply chain decision-making especially in the restaurant industry; to assess the pros and cons of centralized and decentralized supply chain operations; and to evaluate different alternatives in supply chain planning, for best service level at minimum cost.

This case visualizes the planning of supply chain drivers and process improvement to enhance supply chain speed and flexibility. Asim Rizvi has recently joined as senior supply chain manager at Food Lord, a renowned chain of restaurants in Pakistan. As instructed by his CEO, Rizvi has to take a decision for centralization, or to continue the decentralization of supply chain operations at two of their highest selling branches. These two branches were located at a distance of 125 km from each other. The objective of supply chain operations’ consolidation was to minimize cost and further improve the service level. Rizvi was confused about the decision because any decision cannot be taken on the basis of cost and benefit analysis only. A 360-degree analysis and future requirements also play a vital role to decide about supply chain operations. The CEO was very excited to take this decision; that is why newly hired manager Rizvi was analyzing all the facts to reach a decision that would be best for their business. Centralized or decentralized supply chain decision was not easy because normally the business dynamics completely change due to unpredictable customer demand, unavailability of professional suppliers and unavailability of a strong information system, etc.

BBA and MBA

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CSS 9: Operations and Logistics.

The main research question addressed in this paper is how two independent retail outlets in a franchise chain would react to each other on the quality of services. To better explain the interaction, the franchise as an organizational form and its peculiar characteristics compared to the integrated firm on the one hand and market transactions on the other hand are initially discussed. The paper then proposes a theoretical model of the “free‐riding phenomenon” related to the quality of services in the franchise chain, and interactions on the quality of services between the independent outlets in different environments. As spill‐over exists, two franchisees start to react to each other's quality of services and they increase the quality as the positive spill‐over effect becomes significant. The equilibrium with spill‐over gets close to that without spill‐over, as the spill‐over effect approaches zero.

The purpose of this study to improve the efficiency of customer acquisition and retention through the design of salary information disclosure mechanism.

This study develops a stylized game-theoretic model of delegating customer acquisition and retention, focusing on how firms choose delegation and wage information disclosure strategy.

The results confirm the necessity for enterprises to disclose salary information. When sales agents are risk neutral, firms should choose multi-agent (MA) delegation and disclose their wages. However, when agents are risk averse, firms may disclose the wages of acquisition agents or both agents in MA delegation, depending on the uncertainty of the retention market.

This paper contributes to the literature on delegation of customer acquisition and retention and demonstrates that salary disclosure can be used as a supplement to the incentive mechanism.

This study considers transitive service triads, which consist of three dyads formed by three actors: supplier, logistics service provider and customer, who remain directly linked by one or more of the upstream and downstream flows of products, information and finances. This paper aims to explore the link between information governance, decentralized information technologies and supply chain self-organization, and their resulting impact on network performance in the transitive service triads.

Drawing upon the tenets of the theory of complex adaptive systems and supply chain practice view, this paper involves an empirical investigation that uses survey data gathered from transitive service triads in the European countries. The study uses partial least squares structural equation modeling to estimate the formative-reflective hierarchical component model and test the research hypotheses.

Information governance defines how supply chain information flows are controlled, accessed and used by a focal organization and its business partners. As empirically evidenced in this study, it can be depicted as a latent construct consisting of three distinct dimensions of information custody, information ownership and right to data access. Likewise, the study also indicates that supply chain self-organization, as a second-order construct, consists of three interactive self-organization actions undertaken by specific firms participating in the triadic arrangement. Supply chain self-organization is thus produced by firms that are reciprocally interrelated and interacting, having effects on one another. Furthermore, the study also highlights that information governance creates an environment for applying decentralized information technologies, which then positively affects supply chain self-organization. Finally, the research also empirically operationalizes the construct of network performance within the transitive service triads.

Although the results provide several major contributions to theory and implications for practitioners, the study still demonstrates some methodological constraints. Specifically, although the study uses a relatively large research sample of 350 transitive service triads, it still focuses only on a selected group of industries and is limited to investigating solely a particular type of service triads.

Given the increasing interest in investigating triads, this study examines how information governance and decentralized information technologies support supply chain self-organization to yield network performance in transitive service triads.

Information sharing helps improve the efficiency of the supply chain. However, there are some problems in the multi-stage structure supply chain, such as untimely information feedback and distortion. Despite recent progress in ensuring improved collaboration in the past decade or so, the inefficiency status continues to persist. It is also difficult to add value to the supply chain. The information sharing framework and decentralized model designed in this paper are to deal with existing problems.

This paper is based on the theoretical research of supply chain information asymmetry and synergetics. We attempt to introduce blockchain technology into supply chain operation management, reconstruct information sharing architecture and provide a new decentralized mode to promote the collaborative operation of all nodes. The information sharing and decentralization operational model are built, which has changed the hierarchical relationship between upstream and downstream enterprises, regarding customers as the center of the whole system and effectively reducing the bullwhip effect. Finally, we selected the home supply chain as an example design and performed system dynamics simulation on the blockchain-based operation process.

The model of setting up the scene application mode based on blockchain is helpful to realize the goal of supply chain management to reduce cost, improve quality and enhance the overall efficiency of the system.

Based on the blockchain technology, this paper constructed a new supply chain operation mode and used the synergetic theory and the concept of the product–service system to explain the process of value increment in detail.

The purpose of this paper is to investigate the effects of product substitutability on sales performance of integrated and decentralised supply chains. The authors model supply chain performance effects by applying a Cournot equation to a combination of different industry configurations. The study aims to extend existing equilibria models in different supply chains by including the effects of product substitutability on supply chain performance. By extending existing equilibria models, the authors explore the relationship between the degree of product substitutability, chain structure and chain performance when some actors of the supply chain behave as Stackelberg leaders in a duopoly.

The paper models a supply chain performance by applying a Cournot equation to different supply chain structures in a duopoly.

The findings indicate that, for each specific-supply chain structures in different market configurations, when product substitutability reaches a certain threshold decentralised supply chains outperform integrated chains, in disagreement with common belief in current existing literature.

The study is limited to the application of differential equations in a competitive market configured as a duopoly. Future studies might extend the same model to a competitive market characterised by more than two actors. The findings imply that current tendency of lean implementations through integrated supply chains does not always favour supply chain performance.

The paper includes implications for the development of a stronger differentiation strategy based on consumer value when markets are characterised by high-product substitutability.

These findings highlight the importance of differentiation and consumer-value generation in markets that follow Nash equilibria as opposed to the current focus on price competition.

The aim of this paper is to study the optimal pricing decision in a supply chain with a dual distribution channel in a centralized and decentralized decision-making systems and investigate the economic impact of retail services on pricing behaviors with respect to the power structures.

To reach the equilibrium behavior of decision-makers, two-stage optimization, the Stackelberg game and the Bertrand–Nash game have been used. Also, to explore the effect of environmental uncertainty on the behavior of decision-maker, demand functions are characterized as an uncertain price dependent, service dependent and channel dependent. Decision parameters are based on experts’ belief degree, in the sense of uncertainty theory initiated by Liu (2007).

Obtained results reveal that the retail services have a strategic role in the centralized supply chain and the decentralized supply chain with dominant manufacturer, while both the supply chain and the consumer suffer from higher environmental indeterminacy.

This study is based on possible scenarios of dual distribution system only. Further research is recommended to investigate the applicability of the authors framework in different distribution systems.

The study findings are believed to be valuable for supply chains and organizations about to make a strategic decision on price of their good/service.

The paper contributes to the scarce literature on Uncertainty Theory initiated by Liu (2007), and combination of it with Game Theory for pricing in distribution system of supply chains. The study also contributes by investigating impact of non-price competitive factor (level of service) on pricing strategy.

The paper attempts to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a two-part tariff coordination mechanism.

To deal with this pricing conflict problems of dual-channel supply chain consisting of dominant manufacturer and a retailer, considering the fact that online reviews and in-sale service are important factors on consumers’ purchase decisions, the authors establish some basic models and exploit them to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a profit-sharing coordination mechanism.

The results show that the optimal online direct selling price is positively correlated with product perceived quality obtained from online reviews and negatively correlated with the in-sale service. The traditional retail price is positively correlated with the in-sale service and weakly correlated with online reviews. For the manufacturer and retailer, whether decentralized decision or coordination contract, their profits increase with the increase of the in-sale service in a certain range and quality perceived from spontaneous online reviews. Online reviews and in-sale service are important factors on consumers’ purchase decisions. Positive in-sale services and online reviews can provide consumers with a better shopping experience, thereby promoting their enthusiasm for shopping and improving their quality of life. The two-part tariff coordination mechanism improves the profits of the manufacturer and the traditional retailer, respectively, through the transfer fee.

The proposed approach can well analyze the channel conflicts and pricing problems between retailers and manufacturers with respect to product offline price and online price. The analysis and results can inform decision-making for manufacturers and retailers.