© 2010

Relational Supply Contracts

Optimal Concessions in Return Policies for Continuous Quality Improvements


Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 629)

Table of contents

  1. Front Matter
    Pages 1-14
  2. Michaela Isabel Höhn
    Pages 1-17
  3. Michaela Isabel Höhn
    Pages 19-34
  4. Michaela Isabel Höhn
    Pages 35-54
  5. Michaela Isabel Höhn
    Pages 55-75
  6. Michaela Isabel Höhn
    Pages 77-88
  7. Michaela Isabel Höhn
    Pages 109-110
  8. Back Matter
    Pages 1-11

About this book


Supply relations are often governed by so-called relational contracts. These are informal agreements sustained by the value of future cooperation. Although relational contracts persist in practice, research on these types of contracts is only emerging in Operations and Supply Chain Management. This book studies a two-firm supply chain, where repeated transactions via well-established supply contracts and continued quality-improvement efforts are governed by a relational contract. We are able to characterize an optimal relational contract, i.e., to develop policies for supplier and buyer that structure investments in quality and flexibility in a way that no other self-enforcing contract generates higher expected joint surplus. A second goal is to compare the performance of different returns mechanisms in the context of relational contracting (quantity flexibility and buy-back contracts). Industry studies motivate the presented model.


Buy-Back Contract Quality-Improvement Efforts Quantity Flexibility Contract Relational Contract Supply Chain Contract supply chain supply chain management

Authors and affiliations

  1. 1.Porsche Consulting GmbHBietigheim-BissingenGermany

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