Abstract

We consider aretailer sources from an economically weaker supplier for a high-quality keymaterial. The production of the material needs to comply with social and environmentalstandards over time. However, such compliance is costly, and the cost varieswith privately observed dynamically changing environment (termed as the state),so the supplier may cut corners, risking losing the ability to supply in thefuture. While retailer can invest to reduce the compliance cost, the investmentoutcome is uncertain. Therefore, each party faces a trade-off betweenshort-term gains/losses and long-term losses/gains. We present a dynamic modelto capture these complexities and explore incentive mechanisms that enable allparties collaborate to achieve sustainable quality supply. We propose asustainability index that reflects the supplier's compliance status, and thenconstruct a dynamic mechanism to achieve the first-best index in each period.The payments to the supplier reflect both current and future states. Thismechanism allows both parties' voluntary participation and induces truthfulinformation exchange, self-enforcement, as well as first-best retailerinvestments. We show that the retailer implements the mechanism and invests inthe supplier only if the collaboration is longer than a certain contractlength. Thus, we uncover situations where the support from the non-for-profitorganizations is particularly valuable.

Time

12月30日（星期三）10:00-11:30

Speaker

Fang Liu iscurrently a visiting professor at Chinese Academy of Sciences. She received herPhD in Operations Management from Fuqua School of Business, Duke University.Her primary research interests are in humanitarian operations, mechanismdesign, and sustainable operations. She is currently working on multipleprojects, including verious allocations problems with applications inhumanitarian operatisons and e-commerce. Her paper has appeared in OperationsResearch, Manufacturing and Service Operaions Management and Production andOperations Management. She is a reviewer for many top journals such asOperations Research, Math of OR, MSOM, and POMS. 

Venue

Zoom会议室ID:93687867298

密码：278378