Optimal Product Quality of Supply Chain Based on Information Traceability in Fashion and Textiles Industry: An Adverse Logistics Perspective

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.