Supply Chain Strategies in the Presence of Supply Capacity Uncertainty, Consumer Trade-in Services, or Human Behavioral Biases

A supply chain describes the entire process of providing a product or service from suppliers to customers through various manufacturers, distributors, retailers or other intermediaries. As the goal of supply chain management is to maximize overall supply chain surplus, operations management researchers systematically study inventory management, sourcing strategy and supply-network design from a supply chain perspective. Such an approach can capture the connections and influences of decisions made by individual agents in the supply chain. Understanding the optimal supply chain decisions under various scenarios ultimately helps to design better supply chain strategies to increase overall supply chain profitability.;This dissertation proposes three essays using both analytical models and behavioral experiments to explore supply chain strategies in the presence of supply-capacity uncertainty, consumer trade-in services, or human fairness concerns. Specifically, the three essays study the following: 1) The first essay studies how uncertainty in supply capacity affects optimal ordering and pricing decisions, supplier and retailer profits, and incentives to reduce such uncertainty. Surprisingly, if two suppliers sell their identical products indirectly to the market through a retailer, then capacity risk reduction does not necessarily translate into increased profits for the supplier that reduces its risk. 2) The second essay studies the structure of the supply chain facilitating used-product return from, and resale to, end consumers and the impact of structure and key parameters on the effectiveness and efficiency of consumer trade-in programs. We model the typical supply chain structure of the trade-in program and study how the return quality will affect the program efficiency and agent incentives towards individual structures. 3) The third essay is a behavioral study on how private manufacturing cost information may affect channel interactions in the presence of human equity concerns. Under a simple wholesale price-only contract, we show that equity concerns lead pricing decisions to deviate from the standard analytical predictions, which improves channel performance in terms of better supply chain efficiency. As we further explore how fairness perception of agents' affects a supply chain under private production cost information, our results support that preference for equity is robust to bounded rationality, but sensitive to cost information asymmetry.