Research On Supply Chain Quality Investment Incentive And Quality Competition Strategy

The competition between enterprises has now been changing to competition between supply chains. Product quality is critical for enhancing supply chain competitive advantage. The quality of a product is guaranteed by all members in the supply chain for producing the product. Therefore, traditional firm centric quality management must transform to inter-organizational supply chain orientation.This thesis explores some supply chain contracts for quality investment incentive and quality competition. The main work of this thesis is as follows:Firstly, we analyze the quality effort and pricing decisions in a supply chain composed of an original equipment manufacture (OEM) and a contract manufacture (CM). The equilibrium quality effort and sale price under three different contracts are obtained. By comparing the equilibrium strategies, it is found that both the revenue sharing contract and cost sharing contract can simulate the CM to invest more to improve product quality and can increase the OEM’s and the CM’s expected profit and improve the supply chain performance compared with the wholesale price contract. In addition, the revenue sharing contract is a comparatively better choice.Secondly, we explore quality competition between two supply chains which compete for market demand on both price and quality. The optimal strategies are obtained with the different undertaken modes of salvage value. We also illustrate the results by numerical experiments and discuss the equilibrium decision pattern and the impact of the salvage value undertaken modes on industry average quality, industry average price, supply chain profit and industry profit.