Exploring the tension between theory and practice regarding complexity and performance in contract design is especially relevant. The goal of this paper is to understand why simpler contracts may commonly be preferred in practice despite being theoretically suboptimal. We study a two-tier supply...

Deadly factory fires. Illegal pollution. Injured workers. Many brands have recently been tarnished by publicity of suppliers' labor and environmental violations. This paper provides guidance to buyers as to how they can motivate their suppliers to comply with labor and environmental standards....

A manufacturer must choose whether to <i>delegate</i> component procurement to her tier 1 supplier or <i>control</i> it directly. Because of information asymmetry about suppliers' production costs and the use of simple quantity discount or price-only contracts, either delegation or control can yield...

The experiences of the largest corporation in the world and those of a start-up company show how companies can profitably reduce greenhouse gas emissions in their supply chains. The operations management literature suggests additional opportunities to profitably reduce emissions in existing...

We consider an assemble-to-order system with a high volume of prospective customers arriving per unit time. Our objective is to maximize expected infinite horizon discounted profit by choosing product prices, component production capacities, and a dynamic policy for sequencing customer orders...

We consider an assemble-to-order system with a high volume of prospective customers arriving per unit time. A companion paper established that with optimal product prices, component production capacity, and sequencing of orders for assembly, the system can be approximated by a diffusion process...

Consider a production system which rapidly assembles many different products from inventories of modular components. Customer orders for each product arrive according to a renewal process with known rate and variance. Orders are lost if not filled within the product-specific target leadtime....

This paper considers two firms that engage in joint production. The prospect of repeated interaction introduces dynamics in that actions that firms take today influence the costliness and effectiveness of actions in the future. Repeated interaction also facilitates the use of informal agreements...

A manufacturer writes supply contracts with N buyers. Then, the buyers invest in innovation, and the manufacturer builds capacity. Finally, demand is realized, and the firms renegotiate the supply contracts to achieve an efficient allocation of capacity among the buyers. The court remedy for...

After entering into supply contracts, firms often later renegotiate the terms of those contracts. For example, firms that obtain market demand information after signing supply contracts may benefit by renegotiating the contracts to allow buyers facing poor market conditions to purchase less than...