Understanding the impact of incentives on the actions of a supply chain partner is especially important when
A)there are two or more members in the supply chain.
B)the third party's actions are not fully observable.
C)more than two firms competing for the same pool of customers.
D)the supply chain uses outsourcing.

Question

Quizplus · Accepted Answer

When a supply chain partner's actions are not fully observable, incentivizing them becomes crucial to ensure they act in the best interest of the supply chain. This is often the case with third-party partners who may have different objectives or priorities. Understanding the impact of incentives becomes even more essential in such situations.

Understanding the Impact of Incentives on the Actions of a Supply