Journal of Applied Mathematics

  • J. Appl. Math.
  • Volume 2014, Special Issue (2014), Article ID 842409, 10 pages.

Differential Game Analyses of Logistics Service Supply Chain Coordination by Cost Sharing Contract

Haifeng Zhao, Bin Lin, Wanqing Mao, and Yang Ye

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Abstract

Cooperation of all the members in a supply chain plays an important role in logistics service. The service integrator can encourage cooperation from service suppliers by sharing their cost during the service, which we assume can increase the sales by accumulating the reputation of the supply chain. A differential game model is established with the logistics service supply chain that consists of one service integrator and one supplier. And we derive the optimal solutions of the Nash equilibrium without cost sharing contract and the Stackelberg equilibrium with the integrator as the leader who partially shares the cost of the efforts of the supplier. The results make the benefits of the cost sharing contract in increasing the profits of both players as well as the whole supply chain explicit, which means that the cost sharing contract is an effective coordination mechanism in the long-term relationship of the members in a logistics service supply chain.

Article information

Source
J. Appl. Math., Volume 2014, Special Issue (2014), Article ID 842409, 10 pages.

Dates
First available in Project Euclid: 27 February 2015

Permanent link to this document
https://projecteuclid.org/euclid.jam/1425050739

Digital Object Identifier
doi:10.1155/2014/842409

Citation

Zhao, Haifeng; Lin, Bin; Mao, Wanqing; Ye, Yang. Differential Game Analyses of Logistics Service Supply Chain Coordination by Cost Sharing Contract. J. Appl. Math. 2014, Special Issue (2014), Article ID 842409, 10 pages. doi:10.1155/2014/842409. https://projecteuclid.org/euclid.jam/1425050739


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