Design of traceability systems for product recall
研究两级供应链中制造商与供应商因激励错位导致可追溯性不足的问题，设计利益共享机制以提升全链条可追溯性并降低召回损失。
A product recall is very expensive and a poorly executed recall can be devastating to a company’s reputation. It is, therefore, important to improve the traceability for supply chains to address potential recalls. This paper studies the recall dynamics in a two-stage supply chain with a manufacturer and two suppliers. It is shown that the suppliers would opt-out in improving traceability due to misalignment of incentives, leading to diminishing traceability of the whole supply chain and high product recall liabilities for the manufacturer. To address this problem, this research designs an interest-sharing mechanism by which the recall liability reduction of the manufacturer due to improved traceability can be shared with the suppliers to induce traceability improvement effort. Results show that the interest-sharing mechanism improves not only the economic benefit, but also the traceability for each party. We also provide a systematic framework to choose the design parameters, including the degree of accuracy and level of coding, for the supply chain to realise such benefits.