A review on select models for supply chain formation

Supply chain formation is becoming a new and challenging topic of research in supply chain management. It basically deals with selection of suppliers or group of suppliers, which are rational in nature, to make them partners in the supply chain. Because of this rationality a game is induced between the suppliers. This paper is an attempt to compare mechanism design, negotiation, and contract theory where the issue of rationality is well handled, which serves as an input for the comparative analysis of the incentives provided to participants/suppliers. Also, this paper highlights some of the essential issues, challenges and complexities in both mechanism design and negotiation model which will be useful for researchers and supply chain practitioners working in this interesting and challenging area. Finally, this paper comes up with the future directions of developing the optimal strategies, addressing the identified issues, challenges and complexities associated with supply chain formation.