Improper Incentives Leading to Lack of Coordination in a Supply Chain

Question

In what way can improper incentives lead to a lack of coordination in a supply chain? What countermeasures can be used to offset this effect?

Consider a supermarket deciding on the size of its replenishment order from Proctor & Gamble. What costs should it take into account when making this decision?

Summary

This question belongs to supply chain management and discusses about improper incentives leading to lack of coordination in a supply chain.

Word count: 132