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Article
Publication date: 16 April 2024

Richard Tarpey, Jinfeng Yue, Yong Zha and Jiahong Zhang

The importance of service firms cooperating with digital platforms is widely acknowledged. The authors study three contractual relationships (fixed-cost, cost-sharing, and profit…

Abstract

Purpose

The importance of service firms cooperating with digital platforms is widely acknowledged. The authors study three contractual relationships (fixed-cost, cost-sharing, and profit-sharing) between service firms (specifically hotels) and digital platforms in a highly fragmented service supply chain to examine which of these contract types optimizes profits.

Design/methodology/approach

The authors extend prior models analyzing the optimal expected total profit from the travel service firm (hotel)–digital platform relationship, providing new insights into each contract type’s ability to coordinate decentralized systems and optimize profits for both parties.

Findings

This study finds that fixed cost contracts cannot coordinate the decentralized system. Cost-sharing contracts can coordinate the decentralized system but only allow one channel profit split. In contrast, profit-sharing contracts may not always perfectly coordinate the decentralized system but support alternative profit allocations. Practically, both profit-sharing and cost-sharing contracts are preferable to fixed-cost contracts.

Practical implications

The paper includes implications for travel service firm managers to consider when structuring contracts with digital platforms to focus on profit optimization. Profit-sharing contracts are most preferable when cost and revenue data are fully shared between parties, while cost-sharing contracts are preferable over fixed-cost contracts.

Originality/value

This study extends prior investigations into the utility of different contract types on the optimal profit of a travel service firm (hotel)-digital platform provider relationship. The research fills a gap in the literature concerning the contracts used in these relationship types.

Details

Journal of Service Theory and Practice, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2055-6225

Keywords

Article
Publication date: 30 November 2023

Wenbo Li, Bin Dan, Xumei Zhang, Yi Liu and Ronghua Sui

With the rapid development of the sharing economy in manufacturing industries, manufacturers and the equipment suppliers frequently share capacity through the third-party…

Abstract

Purpose

With the rapid development of the sharing economy in manufacturing industries, manufacturers and the equipment suppliers frequently share capacity through the third-party platform. This paper aims to study influences of manufacturers sharing capacity on the supplier and to analyze whether the supplier shares capacity as well as its influences.

Design/methodology/approach

This paper deals with conditions that the supplier and manufacturers share capacity through the third-party platform, and the third-party platform competes with the supplier in equipment sales. Considering the heterogeneity of the manufacturer's earning of unit capacity usage and the production efficiency of manufacturer's usage strategies, this paper constructs capacity sharing game models. Then, model equilibrium results under different sharing scenarios are compared.

Findings

The results show that when the production or maintenance cost is high, manufacturers sharing capacity simultaneously benefits the supplier, the third-party platform and manufacturers with high earnings of unit capacity usage. When both the rental efficiency and the production cost are low, or both the rental efficiency and the production cost are high, the supplier simultaneously sells equipment and shares capacity. The supplier only sells equipment in other cases. When both the rental efficiency and the production cost are low, the supplier’s sharing capacity realizes the win-win-win situation for the supplier, the third-party platform and manufacturers with moderate earnings of unit capacity usage.

Originality/value

This paper innovatively examines supplier's selling and sharing decisions considering manufacturers sharing capacity. It extends the research on capacity sharing and is important to supplier's operational decisions.

Details

Industrial Management & Data Systems, vol. 124 no. 2
Type: Research Article
ISSN: 0263-5577

Keywords

Book part
Publication date: 23 November 2015

Nicolae Stef

In bankruptcy, a reorganization procedure is based on the terms of a reorganization plan aimed to save a financially distressed firm. We provide an original approach of the…

Abstract

In bankruptcy, a reorganization procedure is based on the terms of a reorganization plan aimed to save a financially distressed firm. We provide an original approach of the reorganization plan that we treated as a future contract that demands to creditors a certain degree of cost sharing. This paper examines how the sharing of the reorganization plan costs influences the bankruptcy outcome of such firm.

The sharing of the costs between creditors and debtor is analyzed by a static theoretical model that uses a Lagrangian approach.

We show that debtors have strong incentives to propose reorganization plans which provide an expected gain for creditors higher than the liquidation value of the firm and lower than the payment of the reorganization plan with an optimal sharing degree. Hence, a reorganization plan can be rejected by creditors if the sharing degree is too important.

The liquidation of the firm can be avoided if the design of the reorganization plan is improved by performing an appraisal or purchasing the services of an audit company.

The novelty of this paper resides in the distinction of two types of bankruptcy legal systems. The first one represents a pro-creditor or a creditor-friendly bankruptcy system in which the claimants’ payment is not limited to a fixed value written in the reorganization plan. Conversely, we treated the case of a debtor-friendly bankruptcy system which limits the creditors’ payment. The results of our model hold independently of the bankruptcy law orientation, that is, pro-creditor or pro-debtor.

Details

Economic and Legal Issues in Competition, Intellectual Property, Bankruptcy, and the Cost of Raising Children
Type: Book
ISBN: 978-1-78560-562-8

Keywords

Article
Publication date: 11 June 2019

Vinay Ramani, Sanjeev Swami and Debabrata Ghosh

The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology…

Abstract

Purpose

The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology adoption effort leading to a price premium effect for the supply chain players.

Design/methodology/approach

The paper uses game theoretic approach to analyze the model of inter-firm interaction in a vertical channel setting consisting of a retailer and manufacturer. The paper studies strategic decisions of the channel members in a decentralized and centralized structure and extends this to decision making under contractual settings.

Findings

A two-part tariff completely coordinates the green supply chain, while a cost sharing and revenue sharing contract only achieve partial coordination. Nevertheless, a cost sharing, as well as a revenue sharing contract, increases the greening and technological adoption effort by the manufacturer while yielding the supply chain members a strictly larger profit. Furthermore, a revenue sharing contract in comparison to a cost sharing contract, leads to a larger greening and technological adoption effort by the manufacturer, lower wholesale and retail prices and a strictly larger profit for both the manufacturer and the retailer.

Originality/value

This paper contributes to the green supply chain pricing, technology and contract literature considering strategic interactions between a manufacturer and retailer in a supply chain under price premium effects of greening activities and technological advancements.

Details

Benchmarking: An International Journal, vol. 28 no. 5
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 12 September 2022

Aishwarya Dash, S.P. Sarmah, Manoj Kumar Tiwari and Sarat Kumar Jena

Currently, digital technology has been proposed as a new archetype for developing an effective traceability system in the perishable food supply chain (FSC). Implementation of…

Abstract

Purpose

Currently, digital technology has been proposed as a new archetype for developing an effective traceability system in the perishable food supply chain (FSC). Implementation of such a system needs significant investment and the burden lies with the members of the supply chain. The purpose of this paper is to examine the impact on the profit of the supply chain members due to the implementation of an effective traceability system with such a large investment. The study also tries to explore the impact of the implementation of such a system by coordination among the members through a cost-sharing mechanism.

Design/methodology/approach

A two-level supply chain that comprises a supplier and retailer is analyzed using a game-theoretic approach. The mathematical models are developed considering the scenario for an individual, centralized and both members invest using a cost-sharing mechanism. For each of the models, the impact of product selling price, information sensing price and quality improvement level on profit is analyzed through numerical analysis.

Findings

The study reveals that consumer involvement can be a strong motivation for the supply chain members to initiate investment in the traceability system. Further, from an investment perspective cost-sharing model is beneficial compared to the individual investment-bearing model. This mechanism can coordinate as well as benefit the FSC members. However, the model is less beneficial to the centralized model from profit and quality improvement levels.

Practical implications

Food wastage can be less from supplier and retailer perspectives. Moreover, consumers can purchase food items only after verifying their shipping conditions. Consequently the food safety scandals can be reduced remarkably.

Originality/value

Digital technology adoption in the perishable FSC is still considered emerging. The present study helps organizations to implement a traceability system in the perishable FSC through consumer involvement and a cost-sharing mechanism.

Details

Benchmarking: An International Journal, vol. 30 no. 9
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 10 April 2017

Qi Zheng, Petros Ieromonachou, Tijun Fan and Li Zhou

Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the…

1875

Abstract

Purpose

Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the contract between retailer and supplier. The optimized prices for the retailer and the supplier, taking the fresh-keeping effort into consideration, are derived.

Design/methodology/approach

To address this issue, the authors consider a two-echelon supply chain consisting of a retailer and a supplier (i.e. wholesaler) for two scenarios: centralized and decentralized decision making. The authors start from investigating the optimal decision in the centralized supply chain and then comparing the results with those of the decentralized decision. Meanwhile, a fresh-keeping cost-sharing contract and a fresh-keeping cost- and revenue-sharing contract are designed. Numerical examples are provided, and managerial insights are discussed at the end.

Findings

The results show that the centralized decision is more profitable than the decentralized decision; a fresh product supply chain (FPSC) can only be coordinated through a fresh-keeping cost- and revenue-sharing contract; the optimal retail price, wholesale price and fresh-keeping effort can all be achieved; and the profit of a FPSC is positively related to consumers’ sensitivity to freshness and negatively correlated with their sensitivity to price.

Research limitations/implications

This research is based on the assumption that demand is relatively stable. It has not addressed when demand is stochastic.

Practical implications

The findings would be useful for managers in fresh food sector in terms of how to deal with suppliers in order to maximize total profit while also provide freshest food to the customers.

Originality/value

Few studies have considered fresh-keeping effort as a decision variable in the modelling of supply chain. In this paper, a mathematical model for the fresh-keeping effort and for price decisions in a supply chain is developed. In particular, fresh-keeping cost-sharing contract and revenue-sharing contract are examined simultaneously in the study of the supply chain coordination problem.

Details

Industrial Management & Data Systems, vol. 117 no. 3
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 August 2002

Jason S.K. Lau, George Q. Huang and K.L. Mak

Information sharing and coordination between buyer and vendor have been considered as useful strategies to improve supply chain performance. The debate is about what information…

1761

Abstract

Information sharing and coordination between buyer and vendor have been considered as useful strategies to improve supply chain performance. The debate is about what information to share and how to share most cost‐effectively to maximize the mutual benefits of the supply chain as a whole and the individual business players. Proposes a systematic framework for investigating the impacts of sharing production information on the supply chain dynamic performance. This framework supports supply chain researches to study impacts of information sharing under various scenarios. Examines, under the framework, an inventory allocation problem in an arborescent distribution supply chain with two distribution channels competing for the same source of supply. Finds that the levels of benefits by sharing information vary with different players involved in the supply chain. Suggests some guidelines to balance the benefits in a supply chain in order to motivate information sharing.

Details

Integrated Manufacturing Systems, vol. 13 no. 5
Type: Research Article
ISSN: 0957-6061

Keywords

Article
Publication date: 19 October 2021

Wucheng Zi, Guodong Li, Xiaolin Li and JiaYu Zhou

This study explores how collaborative cost sharing between the buyer and the supplier in cold chain equipment and marketing and advertising affects the performance of a fresh…

Abstract

Purpose

This study explores how collaborative cost sharing between the buyer and the supplier in cold chain equipment and marketing and advertising affects the performance of a fresh agricultural produce supply chain (FAP-SC).

Design/methodology/approach

We use a contingency approach to modeling different scenarios and analyzing how fairness perception, interplaying with corporative–retailer cost sharing., influences the performance of fresh agricultural produce cold chains.

Findings

The findings of the research highlight the crucial role of the retailer's fairness concern. When the retailer's fairness concern is absent, cost sharing (in cold chain equipment and marketing and advertising) is found to help boost demand and enhance the profits of members of the supply chain; bilateral cost sharing is found to have a more significant impact than unilateral cost sharing. When the retailer's fairness concern is taken into account, however, cost sharing is found to reduce demand at a lower level of fairness coefficient but increases demand at a higher level of fairness coefficient; bilateral cost sharing boosts both demand and profit of the supply chain when the retailer is in a “high concern, high anger” state.

Originality/value

The findings of the research highlight the important role of the buyer's farness perception when supply chain partners adopt collaborative cost sharing programs. This study contributes significantly to research and practice in supply chain collaboration and agricultural cold chain performance.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 34 no. 6
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 19 October 2010

Sylvio Cyr and Chun Wei Choo

This paper aims to examine how knowledge sharing behavior is influenced by three sets of dynamics: a rational calculus that weighs the costs and benefits of sharing; a…

4850

Abstract

Purpose

This paper aims to examine how knowledge sharing behavior is influenced by three sets of dynamics: a rational calculus that weighs the costs and benefits of sharing; a dispositional preference that favors certain patterns of sharing outcomes; and a relational effect based on working relationships.

Design/methodology/approach

Concepts from social exchange theory, social value orientation, and leader‐member exchange theory are applied to analyze behavioral intentions to share knowledge. The study population consists of employees of a large pension fund in Canada. Participants answered a survey that used allocation games and situational vignettes to measure social value orientation, propensity to share knowledge, and perception of cost and benefit.

Findings

The results suggest that personal preferences about the distribution of sharing outcomes, individual perceptions about costs and benefits, and structural relationship with knowledge recipients, all affect knowledge sharing behavior significantly. Notably, it was found that propensity to share knowledge is positively related to perceived benefit to the recipient, thus suggesting that evaluation of cost and benefit in social exchange is not limited to self‐interest, but is also influenced by perceived recipient benefit. Moreover, it was found that the relationship with the sharing target (superior or colleague) also influenced sharing.

Originality/value

Most studies emphasize the organizational benefits of knowledge sharing. This study examines knowledge sharing from the perspective of the individual who approaches knowledge sharing as a social exchange that involves perceptions of costs and benefits, preferences about sharing outcomes, and relationship with the sharing target. The study also introduces innovative methods to measure social value orientation and propensity to share knowledge.

Details

Journal of Documentation, vol. 66 no. 6
Type: Research Article
ISSN: 0022-0418

Keywords

Article
Publication date: 12 November 2020

S. Mahdi Hosseinian, Elham Farahpour and David G. Carmichael

The purpose of this paper is to propose an optimum form of incentive contracts with multiple outcomes and multiple agents.

Abstract

Purpose

The purpose of this paper is to propose an optimum form of incentive contracts with multiple outcomes and multiple agents.

Design/methodology/approach

Utility theory and principal-agent theory provide the underlying basis for this paper. A sample of 60 practitioners from public organizations and private companies participated in an exercise to validate the proposed model.

Findings

The paper shows that, in outcome sharing contracts, the contributions of agents toward outcomes are positively related, while agent effort costs, outcome uncertainty, outcome correlation and agent level of risk aversion are negatively related. The paper further demonstrates that outcome sharing is positively associated with the level of effort selected by the agents.

Originality/value

Outcome sharing models might be used in construction contracts to encourage the agent to act in the interests of the principal. However, few studies have looked at contracts with multiple outcomes and multiple agents. This paper contributes to the current practice of contract management through simplifying the complex nature of multiple incentive contracts and providing theoretical guidance for multi arrangements.

Details

Engineering, Construction and Architectural Management, vol. 28 no. 9
Type: Research Article
ISSN: 0969-9988

Keywords

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