Browsing by Subject "Supply chain coordination"

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Open Access
Contracts for biopharmaceutical manufacturing based on production cost and capabilities
(Taylor & Francis, 2023-06-09) Limon, Yasemin; Martagan, T.; Krishnamurthy, A.
trategic collaborations are critical to the success of efforts aimed at discovering new drugs and therapies in the biopharmaceutical industry. These collaborations aim to leverage domain expertise, asymmetries in production costs and/or capabilities to improve efficiency. Despite increasing collaborations, the biopharmaceutical industry lacks a structured guideline for choosing contracts. We present contract models with effort-based formulations that capture the key characteristics of biopharmaceutical operations and analyse incentive mechanisms such as fixed payment, revenue-sharing, risk-sharing, and cost-sharing in biopharmaceutical collaborations. We show that traditional incentive schemes do not achieve supply chain coordination, although they are commonly used in the industry. We introduce a new contract model called fee-for-effort-and-output contract that encourages the parties to exert higher efforts by offering discounts on their operating costs, and show that this contract achieves coordination with an appropriate selection of contract parameters. We also investigate the efficiency of noncoordinating contracts with traditional incentive schemes and identify the capability and cost structures under which they achieve the highest efficiency possible, to both determine the next-best alternatives and explain their popularity in practice.
Open Access
Supply chain coordination with different objectives
(2013) Haliloğlu, Emre
In a typical supply chain, each party tries to optimize his/her own objective that causes the poor total supply chain performance. By contracting on a set of transfer payments, each firm’s objectives become aligned with the supply chain’s objective, which is called coordination; hence the optimal result for the supply chain can be achieved. In the literature, common treatment to supply chain coordination for the newsboy problem is to analyze the system under the assumption that the objectives’ of the parties are expected profit maximization, however the real life observations show that this might not be the case. Hence, this assumption is relaxed and the supply chain coordination is studied when the objectives’ of the parties are different than the expected profit maximization, which are probability maximization of reaching a target profit, expected return on investment maximization and the probability maximization of reaching a target return on investment under the wholesale price, buy back and the revenue sharing contracts. This thesis reveals that under the assumption of compliance, the coordination is possible for some contract types and the objectives if some conditions are satisfied, however some contracts cannot coordinate the channel for some objectives no matter what the conditions are.