Shared-Savings Contracts for Indirect Materials in Supply Chains: Channel Profits and Environmental Impacts
分析用于化学品等间接材料的节约共享合同，发现这类合同总能提高供应链利润，但不一定减少消耗，且最大化联合利润与最小化消耗的目标通常不一致。
There are many materials for which the quantity needed by a firm is at best indirectly related to the quantity of final product produced by that firm, such as solvents in manufacturing processes or office supplies. For any such “indirect” materials, an inescapable incentive conflict exists: The buyer wishes to minimize consumption of these indirect materials, while the supplier's profits depend on increasing volume. Both buyer and supplier can exert effort to reduce consumption, hence making the overall supply chain more efficient. However, no supplier will voluntarily participate unless contract terms are fundamentally revised. This can be done through a variety of “shared-savings” contracts, where both parties profit from a consumption reduction. This paper analyzes several such contracts currently in use for chemicals purchasing. We show that such contracts can always increase supply-chain profits but need not lead to reduced consumption. We analyze equilibrium effort levels, consumption, and total profits, and show how these change with the contract parameters. We find that the goals of maximizing joint profits and minimizing consumption are generally not aligned. Also, surprisingly, a decrease in a cost parameter can lead to a decrease in profits; it may be necessary (but is always possible) to renegotiate the shared-savings contract to reap the benefits of a cost decrease.