• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.54
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• pp.189-209
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• 2012

This Work intends to study on some issues of business and law in relation to Contract for Turnkey Base System. The continuing advance of export system of the plant with the importance for efficient and effective management emphasizes the need for business and legal approach to uniform international model contract. ICC Model Contract for Turnkey Supply of Industrial Plant by ICC covers a particular category of turnkey contract, i.e. contracts for the supply of a plant or production line to be erected within facilities which already exist or which are constructed by the purchaser. Furthermore, the application of the ICC Model Contract for Turnkey Supply of Industrial Plant leaves much to be desired from a business and legal point of view. Therefore, there would appear to be room for compromise between the supplier and purchaser in respect to make a contact for Turnkey supply of industrial plant.

• The Journal of Industrial Distribution & Business
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• v.13 no.3
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• pp.1-12
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• 2022

Purpose: The revenue sharing contract has been widely used in industries, and its ability to coordinate the supply chain system has been studied by numerous researchers. By reviewing the representative studies on the revenue sharing contract, this study intends to analyze the key features of this coordinating contract and identify its potential to be a more advanced coordination program than the original contract. Research design, data, and methodology: This study reviews past studies on the revenue sharing contract. The selected studies are investigated with a focus on how this contract is described to realize the supply chain coordination and the key issues that they address. Results: The literature review reveals that the revenue sharing contract requires standardized details about what and how to share. This study also finds additional issues that need to be addressed by researchers to improve this coordinating contract. Conclusions: Future researchers are advised to unify the detailed contents of the revenue sharing contract to confirm that it successfully coordinates the supply chain system. In addition, this study proposes key research issues that would enhance the role of revenue sharing contract as a supply chain coordination program.

• Journal of Distribution Science
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• v.22 no.1
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• pp.95-103
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• 2024

Purpose: Focusing on the complex supply chain operations beyond the simple dyadic relationship, this study evaluates the performance of the revenue sharing contract in three stage supply chain system. Research design, data, and methodology: The optimization model is developed to describe the supply chain system where one manufacturer, one wholesaler, and one retailer exist and pursue the maximum level of their own profits. In the numerical examples of the proposed supply chain model, two types of the revenue sharing contract, pairwise and spanning methods, are tested and their performances are compared with the traditional system. Results: The numerical analysis reveals that both types of the revenue sharing contract outperform the traditional system. All supply chain members can achieve the improved profits only when they determine the proper combination of revenue share ratios and price discount rates. Conclusions: This study finds out that both pairwise and spanning revenue sharing contracts can make the positive outcome that is acceptable to all members in three stage supply chain system. When the proper contract content is agreed among the supply chain members, the revenue sharing contract has the potential to be the practically feasible collaboration program for the multiple stage supply chain system.

• The Journal of Industrial Distribution & Business
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• v.14 no.9
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• pp.21-30
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• 2023

Purpose: Focusing on the role of the special contract to collaborate the supply chain operations, this study investigates how the revenue sharing contract affects the performance of Vendor Managed Inventory (VMI). Research design, data, and methodology: The optimization model is formulated to represent two stage supply chain system where the supplier and retailer manage the operations to maximize their own profits. Three supply chain models including the traditional system, VMI, and VMI with revenue sharing contract are compared in the numerical examples. Results: According to the numerical analysis, the entire supply chain system has greater profit under VMI than the traditional system, while VMI alone sacrifices the supplier's profit. With the proper sets of revenue share ratio and wholesale price discount rate, VMI with revenue sharing contract results in the increased profit for both supplier and retailer compared with VMI alone as well as the traditional system. Conclusions: The numerical examples imply that VMI, when it is combined with the revenue sharing contract, can be the effective collaboration program that satisfies every supply chain member. To make VMI with revenue sharing contract to be fair to all supply chain members, they need to agree on the appropriate contract content.

• Journal of Korean Institute of Industrial Engineers
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• v.41 no.3
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• pp.243-252
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• 2015

This paper considers a supply chain consisting of a manufacturer under the cap-and-trade emissions regulation and a permit supplier. We study joint production quantity and investment in reducing permit production cost decisions for centralized and decentralized supply chains. We formulate two supply chain contracts with aims to coordinate the decentralized supply chain; wholesale price contract and cost-sharing contract. Under the cost-sharing contract, the manufacturer shares a part of the investment in reducing permit production cost and then is allowed to purchase emission permit at a lower price. We analytically find that the proposed cost-sharing contract with reasonable parameters can coordinate the supply chain whereas the wholesale price contract is not desirable to achieve the system-wide profit. Numerical example is followed to support the analysis.

• Journal of Korean Society for Quality Management
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• v.46 no.4
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• pp.959-972
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• 2018

Purpose: This study developed a simulation model that incorporates the uncertainty of demand and yield to obtain optimized results for supply chain coordination within environmental constraints. The objective of this study is to examine whether yield management for perishable products can achieve the goal of supply chain coordination between a single buyer and a single supplier under a variety of environmental conditions. Methods: We investigated the efficiency of a revenue-sharing contract and a wholesale price contract by considering demand and yield uncertainty, profit maximizing ratio, and success ratio. The implications for environmental variation were derived through a comparative analysis between the wholesale price contract and the revenue-sharing contract. We performed Monte Carlo simulations to give us the results of an optimized supply chain within the environments defined by the experimental factors and parameters. Results: We found that a revised revenue-sharing contracting model was more efficient than the wholesale price contract model and allowed all members of the supply chain to achieve higher profits. First, as the demand variation (${\sigma}$) increased, the profit of the total supply chain increased. Second, as the revenue-sharing ratio (${\Phi}$) increased, the profits of the manufacturer gradually decreased, while the profits of the retailer gradually increased, and this change was linear. Third, as the quality of yield increased, the profits of suppliers appear to increased. At last, success rate was expressed as the profit increased in the revenue-sharing contract compared to the profit increase in the wholesale price contract. Conclusion: The managerial implications of the simulation findings are: (1) a strategic approach to demand and yield uncertainty helps in efficient resource utilization and improved supply chain performance, (2) a revenue-sharing contract amplifies the effect of yield uncertainty, and (3) revised revenue-sharing contracts fetch more profits for both buyers and suppliers in the supply chain.

• Industrial Engineering and Management Systems
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• v.14 no.3
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• pp.248-274
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• 2015

This study discusses a contract to promote collection and recycling of used products in a green supply chain (GSC). A collection incentive contract is combined with a reward-penalty contract. The collection incentive contract for used products is made between a retailer and a manufacturer. The reward-penalty contract for recycling used products is made between a manufacturer and an external institution. A retailer pays an incentive for collecting used products from customers and delivers them to a manufacturer with a product order quantity under uncertainty in product demand. A manufacturer remanufactures products using recyclable parts with acceptable quality levels and covers a part of the retailer's incentive from the recycled parts by sharing the reward from an external institution. Product demand information is assumed as (i) the distribution is known (ii) mean and variance are known. Besides, the optimal decisions for product quantity, collection incentive of used products and lower limit of quality level for recyclable parts under decentralized integrated GSCs. The analysis numerically investigates how (1) contract for recycling activity, (ii) product demand information and (iii) quality of recyclable parts affect the optimal operation for each GSC. Supply chain coordination to shift IGSC is discussed by adopting Nash Bargaining solution.

• Journal of the Korean Operations Research and Management Science Society
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• v.28 no.4
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• pp.115-129
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• 2003

This paper suggests that the profit sharing contract can be Pareto optimal for both supplier and the purchaser. It is shown that Pareto optimal risk sharing contract can be obtained even though the decisions are made in a decentralized manner. The effect of risk attitude of the members of the supply chain is discussed. We examined various aspects of the risk sharing contract such as risk altitude, bargaining power, and cost of information system. The different risk attitude changes the optimal parameters and decision variables. Especially, we proved that, when both the supplier and the purchaser are risk averse, the purchaser orders less quantity than when the one is risk neutral and the other is risk averse. If the fixed cost for the information system is big enough to satisfy a certain condition, it is Pareto optimal not to share the profit and the purchaser takes all the risk even though he is risk averse.

• Journal of the Korea Society for Simulation
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• v.31 no.1
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• pp.19-27
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• 2022

This study compares and analyzes wholesale(or price-only) contract, revenue-sharing contract, quantity-flexibility contract, and channel-rebate contract in a decentralized supply chain consisting of one supplier and one retailer. By setting the parameters of each coordination contract based on the previous results, we conduct simulations using @RISK for several combinations of these parameters. Under the supply chain coordination, we evaluate the probability of successfully signing a contract and the participant in favor of each contract. As a result, the quantity-flexibility contracts is most advantageous for the retailer and the channel-rebate contracts is most advantageous for the supplier. It revealed that revenue-sharing contracts can be used more flexibly because they can be selected in the widest range to redistribute profits between supplier and retailer.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.53
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• pp.3-29
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• 2012

This article examines the Practical Suggestions in the Contract for the Turnkey Supply of an Industrial Plant based on a study focused on the commentary of "ICC Model Contract" clause which is encouraged by ICC. Especially practical issues are inquired into on business and legal perspective as follows. First, in regard to supply of technical documentation, equipment and spare parts, it is important to supplier and purchaser to agree on obtaining technical documents necessary for installing and operating plant, and also components necessary for it's maintenance. Second, it is about erection, testing, taking over and training chapter. Both parties need to agree about the process of the arrival of equipments and assembly conducted by the supplier and following examination and also training purchaser to operate it Third, when it comes to price, payment conditions, bank guarantees, parties are to make decision on the pricing, payment conditions and currency of contract-payment. Lastly, it is necessary to reach an agreement of the issue of whether it is to be defined as delay or non-performance of the contract and also it's consequences about rights and obligation.