Suresh Sethi's insight on risk management in supply chain contracts and its impact on sales

This paper synthesises two decades of research by Prof. Suresh P. Sethi to explain how risk management in supply chain contracts influences sales performance. Drawing from over 40 analytical studies, it examines contracts such as advance selling, buybacks, push-pull mechanisms, and data-sharing clauses, identifying how each addresses distinct types of risk, inventory, demand forecast, behavioural, and capacity, and activates sales levers like order quantity, pricing, and market coverage. The review classifies canonical models that restore achieving full channel coordination, then reveals that contract effectiveness is often non-linear. Mechanisms like buybacks and advance sales improve outcomes only within specific uncertainty levels, while platform investments foster ‘managed competition’ that expands total market sales. The paper maps these insights across centralised, decentralised, and platform-mediated supply chains, all of which benefit from matching contract design with partners' risk-bearing capacity. Prof. Sethi's early works formalised risk-averse coordination, and subsequent studies have repeatedly built on his frameworks to explain when redistributing risk boosts sales. We close by mapping open gaps in dynamic contracting, multi-tier risk propagation, and sustainability incentives. By clarifying when and why redistributing risk through contract design boosts sales, this study highlights how risk management emerges as a strategic lever for supply chain performance.