A Systematic Literature Review on Quantity Flexibility Contracts in a Supply Chain System

Abstract

This is the first to comprehensively review the issues such as contract parameters and research models/methods of Quantity Flexibility Contract (QFC) in a supply chain system. We are experiencing a low-frequency-high-impact (LFHI) event such as coronavirus (COVID-19), and rapid technological changes, bringing about a rapid change in customer demand now. Matching supply with demand is one of the biggest challenges in Supply Chain Management (SCM). That is because a sudden rise or drop in customer demand makes it difficult to coordinate objectives between a manufacturer and a retailer. Meanwhile, a QFC has been highlighted as an intensive method in response to this rapid change by gaining time for better observing the market demand before placing its final orders. The intention of this paper is twofold. First, we classify QFC’s articles into contract parameters, comparison and composition of QFC with other strategies and contract types, research models, and methods up to the present point. Second, we guide the future research directions and developments of QFC so that many researchers start easily approaching and studying it. We hope that our discovery from the review provides opportunities to spot gaps in the literature that could be accomplished and values for further future research directions.