1;Relational Supply Contracts ;1 1.1;Foreword ;5 1.2;1 Introduction;15 1.2.1;1.1 Motivation and Objectives;15 1.2.2;1.2 Structure;17 1.2.3;1.3 Transactional vs. Relational Procurement;17 1.2.4;1.4 Relational Procurement in Practice;21 1.2.4.1;1.4.1 Consumer Goods Industry;22 1.2.4.2;1.4.2 Automotive Industry;24 1.2.4.2.1;OEM--Supplier Relationship Styles;24 1.2.4.2.2;The US Model;26 1.2.4.2.3;The Japanese Model;28 1.2.4.2.4;Future Trends Affecting the OEM--Supplier Interface;29 1.3;2 Literature Review on Supply Chain Contracts;32 1.3.1;2.1 Introduction to Supply Chain Contracts;32 1.3.1.1;2.1.1 Supply Chain Structure;34 1.3.1.2;2.1.2 Classification of Contracts;35 1.3.1.3;2.1.3 The Newsvendor Model;36 1.3.1.4;2.1.4 Contract Types;38 1.3.1.4.1;Wholesale Price Contract;24 1.3.1.4.2;Buy-Back Contract;26 1.3.1.4.3;Revenue-Sharing Contract;28 1.3.1.4.4;Quantity Flexibility Contract;29 1.3.1.4.5;Sales-Rebate Contract;42 1.3.1.4.6;Quantity Discount Contract;42 1.3.1.4.7;Model Extensions and Other Contract Types;43 1.3.2;2.2 Quantity Flexibility Contract;44 1.3.3;2.3 Buy-Back Contract;45 1.3.4;2.4 Quantity Flexibility vs. Buy-Back Contract;46 1.4;3 Relational Contracts;48 1.4.1;3.1 The Concept;48 1.4.1.1;The Trust Game;24 1.4.1.2;The Relational Contract;26 1.4.2;3.2 The Economists' Approach;52 1.4.2.1;Transaction Cost Economics;28 1.4.2.2;Principal Agent Theory;29 1.4.2.3;Incomplete Contracts;42 1.4.3;3.3 Review of Operations and Supply Chain Management Literature;56 1.4.4;3.4 Analytical Tools;59 1.4.4.1;3.4.1 Game Theory;59 1.4.4.1.1;3.4.1.1 Introduction to Game Theory;59 1.4.4.1.2;3.4.1.2 Game Theory in Supply Chain Analysis;62 1.4.4.2;3.4.2 Dynamic Programming;63 1.4.4.2.1;3.4.2.1 Basic Dynamic Problem;64 1.4.4.2.2;3.4.2.2 Infinite Horizon Dynamic Problems;65 1.5;4 Relational Contracts and Optimal Quantity Flexibility;68 1.5.1;4.1 The Quantity Flexibility Model;68 1.5.2;4.2 Model Analysis;70 1.5.2.1;4.2.1 Nomenclature;71 1.5.2.2;4.2.2 Discounted Expected Profits;72 1.5.2.3;4.2.3 Self-Enforcing Contract;73 1.5.2.4;4.2.4 Total Expected Discounted Profit with Perfect Coordination;74 1.5.2.5;4.2.5 Total Expected Discounted Profit under an Optimal Relational Contract;75 1.5.2.6;4.2.6 Convergence;76 1.5.2.7;4.2.7 A Simple Optimal Relational Contract;81 1.6;5 Relational Contracts and Optimal Buy-Back Price;89 1.6.1;5.1 The Buy-Back Model;89 1.6.2;5.2 Model Analysis;90 1.6.2.1;5.2.1 Nomenclature;91 1.6.2.2;5.2.2 Discounted Expected Profits;92 1.6.2.3;5.2.3 Self-Enforcing Contract;93 1.6.2.4;5.2.4 Total Expected Discounted Profit with Perfect Coordination;94 1.6.2.5;5.2.5 Total Expected Discounted Profit under an Optimal Relational Contract;94 1.6.2.6;5.2.6 Convergence;95 1.6.2.7;5.2.7 A Simple Optimal Relational Contract;96 1.7;6 QF vs. Buy-Back Contract in Buyer-Supplier Relationships;101 1.7.1;6.1 Construction and Analysis of Equivalent Contracts;101 1.7.1.1;6.1.1 Construction of Equivalent Contracts;101 1.7.1.2;6.1.2 The Leeway for Contract Adaptation: A Comparison;103 1.7.1.2.1;Leeway for Adaptation Under a Coordinating QF Contract;42 1.7.1.2.2;Leeway for Adaptation Under the Equivalent Coordinating Buy-Back Contract;43 1.7.2;6.2 Numerical Results;105 1.7.2.1;6.2.1 Impact of Buyer's Profit Share;106 1.7.2.2;6.2.2 Impact of Realized Demand;110 1.7.2.3;6.2.3 Impact of Market Characteristics;111 1.7.3;6.3 Summary;113 1.8;7 Case Study: Supplier Relationship Management at Volkswagen Group;115 1.8.1;7.1 Volkswagen Group;115 1.8.2;7.2 Key Elements of Supplier Relationship Management;115 1.8.2.1;7.2.1 Supplier Collaboration Platform;116 1.8.2.2;7.2.2 Supplier Management Models;117 1.8.2.3;7.2.3 Incentives and Breach of Trust;117 1.8.2.4;7.2.4 Contracts;118 1.8.2.5;7.2.5 Quality;118 1.8.2.6;7.2.6 VWGroupSupply.com;119 1.8.2.7;7.2.7 Sustainable Development;119 1.8.3;7.3 Outlook;120 1.9;8 Conclusion and Outlook;121 1.10;References;123 1.11;Index;131