Specification vagueness and supply quality risk

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Specifying quality requirement is integral to any sourcing relationship, but vague and ambiguous specifications can often be observed in practice, especially when a buyer is in the initial stage of sourcing a new product. In this research, we study a supplier's production incentives under vague or exact quality specifications. We prove that a vague specification may in fact motivate the supplier to increase its quantity provision, resulting in a higher delivery quality. Vague quality specification can therefore be advantageous for a buyer to screen potential suppliers with an initial test order, and then rely on the received quality level to set more concrete quality guidelines. There is a degree, though, to which vague quality specification can be effective, as too much vagueness may decrease the supplier's quantity provision and hence the expected delivery quality.

Original languageEnglish (US)
Pages (from-to)222-236
Number of pages15
JournalNaval Research Logistics
Volume60
Issue number3
DOIs
StatePublished - Apr 1 2013

Keywords

  • quality control
  • specification vagueness
  • supply quality risk

ASJC Scopus subject areas

  • Modeling and Simulation
  • Ocean Engineering
  • Management Science and Operations Research

Fingerprint Dive into the research topics of 'Specification vagueness and supply quality risk'. Together they form a unique fingerprint.

Cite this