【 Title】 Incentive Alignment and Coordination of Project Supply Chains (Authors: Shi Chen and Hau Lee)

【Presenter】Dr. Shi Chen

【Host】 Dr. Simin Huang

【Date】Tuesday, Dec. 15, 2015, 14:00-15:00

【Venue】Room 412, Shunde Building

【Language】English

【Abstract】We consider a project supply chain where a manufacturer carries out a sequence of tasks, and each task requires certain key materials from a supplier. Since a fixed-price contract cannot attain channel coordination, we focus on time-based incentive contracts. Our proposed contract requires optimization of the material delivery schedule as well as the fraction and the timing of a delayed-payment to each supplier. Under the contract, the manufacturer‘s profit is affected by the variance but not by the mean of a supplier‘s lead-time. Each supplier benefits from a reduction in the mean or variance of his own lead-time, whereas the supplier‘s profit is independent of the duration of the on-site tasks and the lead-times of other suppliers. The contract is also robust in various scenarios; in particular, coordination can be achieved even if the manufacturer‘s estimate of the average delivery lead-time is inaccurate.

【Bio】Shi Chen is an Assistant Professor of Operations Management at the University of Washington Foster School of Business. His research focuses on incentive and coordination issues in supply chain management and his areas of specialization include inventory modeling, project management – supply chain management interface, and socially and environmentally sustainable supply chains. His has research works accepted or under review at Management Science, Operations Research, and Manufacturing & Service Operations Management. Prior to joining the Foster School of Business, he received a B.E. (2006) and a M.S. (2008) from Industrial Engineering Department of Tsinghua University, and received a Ph.D. (2013) from the Management Science & Engineering Department of Stanford University.

All interested are welcome!