Looking into robustness of supply chain coordination contracts

Michael Gibb

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The latest in a specially commissioned series of talks highlighting research excellence at City University of Hong Kong (CityU) had a two-fold purpose.

The packed auditorium was not only treated to a vigorous presentation on supply chain management by Professor Yan Houmin, Chair Professor of Management Sciences and the Head of the Department of Management Sciences at CityU.

The gathered students, academics and guests were also offered a flavour of game theory in anticipation of next week’s lecture by Professor John F Nash, the legendary mathematician.

The essence of Professor Yan’s address, part of the President’s Lecture Series: Excellence in Academia, was the discussion of a framework of the consistency of supply chain coordination contracts.

The robustness of a contract between, say, a newspaper vendor and the supplier, can be characterised in terms of how consistent it is in the channel profit distribution, in the agents’ desires to fulfill the contract, and the impact of changing game structures, Professor Yan explained.

“We found that contracts can be designed, evaluated, and classified based on robust measures,” he said.

Using game theory, as delineated by Professor Nash, due to receive an Honorary Doctor of Science at CityU next week, the speaker concluded that a contract’s robustness could be strengthened by focusing on developing a number of sufficient conditions for obtaining “sequence and compliance consistencies” and by highlighting other decision variables such as price.

Professor Yan joined CityU recently after holding positions at the Chinese University of Hong Kong and the School of Management at the University of Texas at Dallas.

His interdisciplinary research has been published in journals as diverse as Operations Research, Manufacturing and Service Operations Management, IIE Transactions, Production and Operations Management, Journal of Optimization: Theory and Applications, and IEEE Transactions.

He has received many awards throughout his career including the Wickham-Skinner Best Paper Award from the 2nd World Conference on Production and Operations Management and the Society of Production and Operations Management (POMs) in 2004.


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