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SCM Implementation Decisions Under Asymmetric Information: An Agency Approach

Author

Listed:
  • Wang Lina

    (School of Economics and Management, Hainan Normal University, Haikou 571158, China)

  • Poelmans Stephen

    (Faculty of Economics and Management, Hogeschool- Universiteit Brussel, KU Leuven Association, Warmoesberg 26, 1000Brussels, Belgium)

  • Milis Koen

    (Campus Vesta, Education Management Industry, Brussels, Belgium)

Abstract

The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation optional decision optimizing models have been developed. In these models, both clients and vendors try to pursue their own benefits. Based upon the principal-agent theory, the models show to what extent a principal (a client) needs to pay more to an agent (a vendor) in a context of asymmetric information. For the client it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system. The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.

Suggested Citation

  • Wang Lina & Poelmans Stephen & Milis Koen, 2020. "SCM Implementation Decisions Under Asymmetric Information: An Agency Approach," Journal of Systems Science and Information, De Gruyter, vol. 8(5), pages 447-457, October.
    • Handle: RePEc:bpj:jossai:v:8:y:2020:i:5:p:447-457:n:4
    DOI: 10.21078/JSSI-2020-447-11
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    References listed on IDEAS

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