Essays in supply chain contracts

This dissertation investigates two supply chain contracts that are widely utilized in various industries: the quantity flexibility contract and the price discount scheme. Motivated by the need of a more through understanding of the implications of supply chain contracts, we develop three supply chain contract models in three different types of supply chain structures: (1) the quantity flexibility contract with incentives in a one-supplier, one-buyer supply chain; (2) the quantity flexibility contract and price markdown scheme in a two-supplier, one-buyer supply chain; (3) the price discount scheme in a three-echelon supply chain consisting of a supplier, an original equipment manufacturer (OEM), and a buyer. The first essay focuses on designing a new quantity flexibility that seeks to balance the inventory risk between the traditional QF contract and the price-only contract for both the buyer and the supplier. The second essay analyzes the competition between the quantity flexibility contract and the price discount scheme. The third essay investigates the impact of price discount on retail price, capacity planning, and stocking policy decisions.;We found in essay 1 that the new quantity flexibility contract with incentives is able to achieve supply chain coordination. It also allows firms to identify areas where the new contract is able to Pareto-improve from the traditional quantity flexibility contract under certain circumstances. In essay 2, we present the conditions under which flexibility is more desirable and areas where the price discount has an advantage. We found that in most cases the buyer will be better off simply using only one supplier. In essay 3, we show that firms will need to increase the capacity and stocking level to cope with the impact of price discount. We found that when price difference is not significantly large and the component's arrival time is uncertain, firms will be better off keeping higher inventory beyond the effective time of the new price. We address discussions, managerial implications, and provide directions for future research opportunities in each of the three essays.