Impact of transfer pricing methods for tax purposes on supply chain performance under demand uncertainty

PurposeThe purpose of this paper is to explore the effects that customer structured and unstructured information sharing (IS) can have on customer operational and strategic coordination and on supply chain performance (SCP). In addition, the study examines how customer IS influences customer coordination under various levels of demand uncertainty (DU).Design/methodology/approachThe conceptual model for this study is designed on the basis of information-processing theory (IPT). Using data collected from 622 manufacturers in mainland China and Taiwan, the theoretical model is tested using the structural equation modeling method.FindingsThe authors find that both customer structured IS and unstructured IS are positively associated with customer strategic coordination. Customer structured IS increases customer operational coordination, but customer unstructured IS does not. DU positively moderates the relations between customer unstructured IS and strategic coordination, and between customer structured IS and operational coordination. Also, DU negatively moderates the relationship between customer structured IS and strategic coordination. Customer strategic coordination is positively related to SCP and to operational coordination. Customer operational coordination has no significant impact on SCP.Originality/valueThis study deepens our understanding of customer IS by distinguishing between customer structured and unstructured IS. The study also provides a greater understanding of customer coordination by making a distinction between the customer strategic and the operational coordination. The findings extend the empirical application of IPT. In addition, this study’s findings direct SC managers to apply varied customer IS practices that can enhance specific kinds of customer coordination activities, thereby enabling improved SCP.

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Improving Supply Chain Performance and Managing Risk Under Weather-Related Demand Uncertainty

Management Science ◽

10.1287/mnsc.1100.1194 ◽

2010 ◽

Vol 56 (8) ◽

pp. 1380-1397 ◽

Cited By ~ 48

Author(s):

Frank Youhua Chen ◽

Candace Arai Yano

Keyword(s):

Supply Chain ◽

Demand Uncertainty ◽

Supply Chain Performance ◽

Managing Risk

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Information Sharing in Supply Chain Management with Demand Uncertainty

Advances in Information Resources Management - Advanced Topics in Information Resources Management, Volume 5 ◽

10.4018/978-1-59140-929-8.ch003 ◽

2011 ◽

pp. 44-62 ◽

Cited By ~ 3

Author(s):

Zhensen Huang ◽

Aryya Gangopadhyay

Keyword(s):

Supply Chain ◽

Information Sharing ◽

Demand Uncertainty ◽

Bullwhip Effect ◽

Supply Chain Performance ◽

Chain Model ◽

Simulation Approach ◽

Supply Chain Model ◽

Trading Partners ◽

The Impact

Information sharing is a major strategy to counteract the amplification of demand fluctuation going up the supply chain, known as the bullwhip effect. However, sharing information through interorganizational channels can raise concerns for business management from both technical and commercial perspectives. The existing literature focuses on examining the value of information sharing in specific problem environments with somewhat simplified supply chain models. The present study takes a simulation approach in investigating the impact of information sharing among trading partners on supply chain performance in a comprehensive supply chain model that consists of multiple stages of trading partners and multiple players at each stage.

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Sub-Supplier's Decision Affect Supply Chain Performance

International Journal of Applied Logistics ◽

10.4018/ijal.2016070101 ◽

2016 ◽

Vol 6 (2) ◽

pp. 1-32

Author(s):

Manoj Kumar

Keyword(s):

Supply Chain ◽

Transfer Pricing ◽

Supply Chain Coordination ◽

Careful Consideration ◽

Performance Comparison ◽

Variable Cost ◽

Supply Chain Performance ◽

Pricing Scheme ◽

Pricing Schemes ◽

The Impact

This paper studies how transfer pricing schemes interact with sub suppliers' opportunistic behaviors to affect supply chain performance. Effective supply chain management requires careful consideration of sub-suppliers', especially with respect to transfer pricing issues. Firms increasingly approach their sub-suppliers to drive compliance with firms' defined transfer pricing schemes. The paper models the supply chain incorporating asymmetric information among all the parties, supplier's innovation activities, sub suppliers' corruption possibility, and transfer pricing schemes. It examines the impact of various transfer pricing schemes on supply chain efficiency. Specifically, it conducts a performance comparison between the variable-cost transfer pricing scheme and the full-cost transfer pricing scheme. The paper finds that the sub supplier's choice of a transfer pricing scheme affects the supplier's sourcing decisions and the supply chain performance, and the variable-cost transfer pricing scheme performs better in achieving supply chain coordination. Therefore, the present research seeks to explore and increase one's understanding of critical factors that contribute to overcome aforementioned complexities and unique challenges of managing sub-suppliers for transfer pricing schemes. The present research expands on the theory of transfer pricing schemes and sub-supplier management context.

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