Abstract:

According to a complex product system, a beforehand quality control strategy is developed for the main manufacturer to control the outsourcing quality in a small batch production, even under asymmetric information. The optimum quality reward function and the optimum price discount, which can be considered as the incentive and punitive strategies, can be implemented to induce the supplier selecting the optimum quality desired by the main manufacturer. A numerical case is examined to demonstrate the feasibility and effectiveness of the new model, which furnishes a fresh perspective on the supply chain quality management of a complex product.