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Franchise Fee Contracts in Product Service System with Demand Information Asymmetry

In: Contract Analysis and Design for Supply Chains with Stochastic Demand

Author

Listed:
  • Yingxue Zhao

    (University of International Business and Economics)

  • Xiaoge Meng

    (Beijing University of Aeronautics and Astronautics)

  • Shouyang Wang

    (Academy of Mathematics and Systems Science)

  • T. C. Edwin Cheng

    (The Hong Kong Polytechnic University)

Abstract

Chapter 4 examines franchise fee contracts in the product service system with demand information asymmetry. In this chapter, three types of contracts are developed to optimize the operations of product service system in the service-oriented manufacturing supply chain. The first is the franchise fee contract under which a two-part tariff including a wholesale price and a franchise fee is provided. The second is the franchise fee with service requirement (FFS) contract under which a service level is specified in addition to a two-part tariff. The third is the franchise fee with centralized service requirement contract which is similar to the FFS contract but that the service level specified is the system-wide optimal solution. This chapter mainly addresses the issues of how to design the contracts by which to assure a credible information sharing across the supply chain and how different these three forms of contracts affect the supply chain. The research can provide managerial insights for optimizing product service system by franchise fee contracts in the service-oriented manufacturing supply chain with demand information asymmetry.

Suggested Citation

  • Yingxue Zhao & Xiaoge Meng & Shouyang Wang & T. C. Edwin Cheng, 2016. "Franchise Fee Contracts in Product Service System with Demand Information Asymmetry," International Series in Operations Research & Management Science, in: Contract Analysis and Design for Supply Chains with Stochastic Demand, edition 1, chapter 0, pages 91-114, Springer.
    • Handle: RePEc:spr:isochp:978-1-4899-7633-8_4
    DOI: 10.1007/978-1-4899-7633-8_4
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    Cited by:

    1. Tianjian Yang & Chunmei Li & Xiongping Yue & Beibei Zhang, 2022. "Decisions for Blockchain Adoption and Information Sharing in a Low Carbon Supply Chain," Mathematics, MDPI, vol. 10(13), pages 1-23, June.

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