A review on supply chain contracting with information considerations: information updating and information asymmetry

Abstract

Supply chain contracting and the use of information are undoubtedly two critical and influential areas in modern supply chain management. However, relatively little is known about supply chain contracting mechanisms with different information settings. To fill this gap, we review and classify the related supply chain contracting literature into three categories with respect to different kinds of information considerations, namely (i) demand information updating, (ii) supply information updating and (iii) information asymmetry. We report the publication trend and classify the commonly studied supply chain contracts with the use of information such as pricing contracts, commitment contracts and menu of contracts. We discuss how contracting and the use of information influence each other in the supply chain. Moreover, we review the major application areas of information usage and report the historical development of major related topics. Finally, we propose several important future research directions.

Keywords:

• supply chain contracting
• demand information updating
• supply information updating
• information asymmetry

Acknowledgements

The authors sincerely thank two anonymous reviewers for their insightful and critical comments. They also thank the editor Professor Alexandre Dolgui for his kind invitation to develop this paper. Tsan-Ming Choi’s research is partially supported by Research Grants Council (Hong Kong) under the General Research Fund (No. PolyU 152294/16E), Bin Shen's research is partially sponsored by “Chenguang Program” supported by Shanghai Education Development Foundation and Shanghai Municipal Education Commission (15CG34).

Notes

1. Supply chain coordination implies a supply chain is coordinated when its individual members all make their decisions which are the same as the optimal ones for the whole supply chain system (Chopra and Meindl 2015; Pun 2015).

2. In this paper, we focus on the analytical modelling research because of its relevance to the topic. In fact, analytical modelling research is the common approach in exploring supply chains with information considerations.

3. Contract menu is popularly used to deal with information asymmetry in the supply chain.

4. Notice that the sharing contracts are rarely examined in the literature with information asymmetry. However, it does not mean studying sharing contract with information asymmetry is meaningless. The possible future research directions in this area are proposed in Section 7.