Designing Supply Contracts Considering Profit Targets and Risk

时间：2015-09-30

Management Science and Information Systems#39 Seminar

Topic: Designing Supply Contracts Considering Profit Targets and Risk
Speaker: Shiming Deng

Affiliation: Huazhong University of Science and Technology

Time: Friday, 9 October, 2:00-530 P.M

Location: K03, Guanghua Building 2

Abstract: Managers at all stages of a supply chain are concerned about meeting profit targets.We study contract design for a buyer-supplier supply chain, with each party maximizing expected profit subject to a chance constraint on meeting his respective profit target. We derive the optimal contract form (across all contract types) with randomized and deterministic payments. The best contract has the property that, if the chance constraints are binding, at most one party fails to satisfy his profit target for any given demand realization. This implies that ldquoleast risk sharing,rdquo i.e., minimizing the probability of outcomes for which both parties fail to achieve their profit targets, is optimal, contrary to the usual expectations of ldquorisk sharing.rdquo We show that an optimal contract can possess only two of the following three properties simultaneously: (1) supply chain coordination, (2) truth-telling, and (3) non-randomized payments. We discuss methods to mitigate the consequent implementation challenges. We also derive the optimal contract form when chance constraints are incorporated into several simpler and easier-to-implement contracts. From a numerical study, we find that an incremental returns contract (in which the marginal rebate rate depends on the return quantity) performs quite well across a relatively broad range of conditions.

个人简介:
邓世名教授，2003年获得加州大学伯克立分校工业工程和运筹学博士学位。2004年到2009年作为高级工程师和项目负责人在美国加州甲骨文公司（Oracle）总部，从事基于运筹优化算法的先进生产规划与供应链管理系统研发工作。2009年至今为华中科技大学管理学院教授，博士生导师。入选湖北省楚天特聘学者，2009教育部ldquo新世纪rdquo优秀人才计划、湖北省百人计划，第二批湖北武汉东湖高新科技开发区ldquo3551rdquo人才计划，湖北省政协委员。对管理科学的理论和实际问题有深刻的理解，研究成果发表在Management Science,Operations Research,EJOR,IEEE Transactions,IJPE，《管理科学学报》等国内外管理科学与运筹学领域的一流期刊等杂志上。邓世名教授有13年海外的科研和美国顶尖公司的工作经历，曾为美国Oracle公司、FedEx Ground、世界第一的优化软件供应商 ILOG 和顶尖的半导体检测设备生产商KLA ndashTencor承担项目。主持国家自然科学基金面上项目2项，以子课题负责人身份参与国家自然科学基金重大国际合作项目一项。多次在管理科学和运筹学INFORMS、服务运营管理学会MSOM年会上作报告。

欢迎感兴趣的老师与同学参加！