Ulf Schiller

Option Contracts in Supply Chains

This paper considers optimal contracts in supply chains that consist of n≥ 2 firms and face a potential investment hold-up problem. We show that option contracts may solve the incentive problems. First, we provide case-study evidence for the use of option contracts in the semiconductor industry. As our second contribution, we generalize the earlier option contract approach by introducing continuous quantities. Third, we extend the setting tonparties. For long supply chains, the first-best allocation can be achieved if there is a particular order of renegotiations. Copyright 2008 Blackwell Publishing.

Kapazitätsdimensionierung durch aktivitätsorientiertes Kostenmanagement am Beispiel eines Fernsehanbieters

SummaryBroadcasting companies — whether public or private — face increasing cost pressure. This paper develops a case study that uses information about activity-based cost of used and unused capacity in order to economize on labor and materials costs. The driving choice variable is the adjustment of excess (peak-load) capacity. We show that activity-based cost management performs well for materials cost but less well for labor cost. This is due to the fact that broadcasting companies typically mix of employees and freelancers.

Supplier credits, limited liquidity, and timely demand information

We consider supplier-credit contracting between a manufacturer and a liquidity-constrained dealer. We show that the timeliness according to which the dealer receives demand information has a significant impact on the optimal contract. If the manufacturer cannot be sure that a dealer without liquidity has demand information when the contract is written, the optimal contract assigns the same quantity to an ignorant dealer and a dealer who knows that there are unfavorable demand conditions. However, dealers with favorable demand information are screened. If the dealer’s liquidity rises, the manufacturer proposes a contract that resembles the solution of a classic adverse selection model in the spirit of Harris etxa0al. (Manag Sci 28:604–620, 1982). For high liquidity, the optimal supplier-credit contract assigns the same quantity to an ignorant dealer and dealers who have favorable demand information whereas dealers with unfavorable demand information are screened.