Cooperative Supply Chain Management under Asymmetric Information

 

W.Y. Xu, Z.J. Zhang and D.Q. Gong*

 

School of Economics and Management, Beijing Jiaotong University, Beijing, China. *e-mail: gongtuipigua@163.com

 

ABSTRACT

This study investigates supply chain cooperative management problem. In this study, based on principal-agent, firstly we analyses cooperative management factors in supply chain including leading enterprise expected utilities, subsidiary enterprise expected incomes and leading enterprise agency cost, then the incentive contract model is constructed; Secondly the model is solved in the case of symmetric information and asymmetric information; At last, in order to make clear of the model, this paper does mathematical analysis of leading enterprise expected utilities, subsidiary enterprise expected incomes and leading enterprise agency cost. Some important conclusions are obtained: subsidiary enterprise ability, cost coefficient, absolute risk aversion factor and output variance has the same influence on leading enterprise expected utilities and subsidiary enterprise expected incomes; subsidiary enterprise ability, cost coefficient has the same influence on leading enterprise expected utilities, subsidiary enterprise expected incomes and leading enterprise agency cost; leading enterprise expected utilities and subsidiary enterprise expected incomes become bigger and bigger, but leading enterprise agency cost becomes smaller and smaller with absolute risk aversion factor and output variance decreased. etc. Leading enterprise can take on incentive measures (improving subsidiary enterprise ability, decreasing subsidiary enterprise cost coefficient.etc) to optimize supply chain management based on the common factors.

Keywords: Asymmetric information, cooperative supply chain, Principal-Agent, incentive.

 

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Acknowledgements

The study is supported by National Natural Science Foundation(71132008),the Fundamental Research Funds for the Central Universities (B12JB00280) and the Research, Development and Demonstration of Top-Design Decision Support System for Two-Oriented Integration (Z121100000312093), we appreciate the support very much.

 

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