Abstract
This paper investigates and compares two quality control methods, that is, inspection control and traceability control, to optimize supply chain quality in fashion and textiles industry. The objective is to maximize the supply chain participants’ expected profits and to achieve a Pareto improvement of supply chain product quality. Withqualityas a controllable variable indicating the level of opportunistic behavior, thereturnis interpreted as a function ofquality: the higher the quality, the lower the return. Taking into account bothqualityandinventory quantity, we propose and compare the optimal decision-making models for three control methods of supply chain, respectively: decentralized (no control), inspection, and traceability. Further, we use a numerical example to illustrate the relationships amongquality,profits,andquality-control costcoefficients (i.e., inspection-related cost and traceability-related cost). We then analyze and discuss the differences in the applications and scopes of the two control methods. On the one hand, given the poor standardization of fashion and textiles industry in the current practice (especially in China market), the cost of sampling inspection is relatively lower as compared to that of the traceability control method. On the other hand, with the improved industrial standardization and technology, traceability control tends to gain increasing advantages in cost and popularity.
Highlights
Fashion and textiles industry is a major economic sector in developing countries such as China, making significant contributions to economic growth and employment
By considering some practical scenarios in fashion and textile supply chain quality management, we propose four propositions based on Resource-based view (RBV) and dynamic capability view (DCV) and later discuss them using models
From Inference 2, we know that the manufacturer should choose its quality control behaviors by comparing inspection cost coefficient and consumer’s return loss, while the supplier should choose its production quality level by comparing quality cost coefficient and the manufacturer’s return loss, as both cost coefficients are small, the supply chain product quality may be improved
Summary
Fashion and textiles industry is a major economic sector in developing countries such as China, making significant contributions to economic growth and employment. Liu et al [26] constructed an analytical model with both demand and return uncertainties; they study the optimal policy with three-dimensional decisions on pricing, consumer return, and level of modularity under a mean-variance formulation From both analytical and numerical analyses, they obtain several important findings and insights. Balachandran and Radhakrishnan [29] built a supply chain quality control model where the supply chain final product was made up of components produced by the buyer and components produced by the supplier They examined the different impacts of information tracing on quality control in a single moral-hazard case and a double moral-hazard case. Based on the news vendor model, we first develop a principal-agent model for achieving supply chain optimal quality, and we analyze the applicability and differences between inspection-based traditional quality contracts and system-based information traceability control
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