Audit and compliance in supply chains with damage cost sharing under supplier’s responsibility standards
研究了在供应商承担部分损害成本时，买方审计与供应商安全合规的互动关系，发现审计严格性对安全的影响取决于损害成本高低，联合审计在高成本时可能损害安全。
Governmental and industry standards enforce responsibility in supply chains. However, supplier violations often impose costs on buyers, leading to misaligned incentives. Buyer audits act as proactive measures to ensure supplier compliance, while reactive measures hold non-compliant suppliers accountable for damages.We examine the interaction between buyer audits and supplier safety compliance when reputable buyers and a supplier share damages from non-compliance. Buyers and the supplier set their audit and safety levels, respectively, with the supplier bearing a fraction of the damage cost for under-compliance.Our findings indicate that stricter audits enhance supplier safety when damage costs are low but not when costs are high. Likewise, joint audits can compromise supplier safety at high damage costs but enhance it at lower costs. However, shared audits can result in better supplier safety than joint audits. Finally, with high damage costs, suppliers profit more from joint audits than independent audits, while buyers achieve maximum profits in audit scheme that has audit level sufficiently higher than the others.