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

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  • Haifeng Zhao
  • Bin Lin
  • Wanqing Mao
  • Yang Ye

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.

Suggested Citation

  • Haifeng Zhao & Bin Lin & Wanqing Mao & Yang Ye, 2014. "Differential Game Analyses of Logistics Service Supply Chain Coordination by Cost Sharing Contract," Journal of Applied Mathematics, Hindawi, vol. 2014, pages 1-10, April.
    • Handle: RePEc:hin:jnljam:842409
    DOI: 10.1155/2014/842409
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    Cited by:

    1. Jun Wang & Qian Zhang & Xinman Lu & Rui Ma & Baoqin Yu & Huming Gao, 2022. "Emission reduction and coordination of a dynamic supply chain with green reputation," Operational Research, Springer, vol. 22(4), pages 3945-3988, September.
    2. Sahani Rathnasiri & Pritee Ray & Carlos A. Vega-Mejía & Sardar M. N. Islam & Nripendra P. Rana & Yogesh K. Dwivedi, 2022. "Optimising small-scale electronic commerce supply chain operations: a dynamic cost-sharing contract approach," Annals of Operations Research, Springer, vol. 318(1), pages 453-499, November.
    3. Liu, Xiaotong & Zhang, Kai & Chen, Bokui & Zhou, Jun & Miao, Lixin, 2018. "Analysis of logistics service supply chain for the One Belt and One Road initiative of China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 117(C), pages 23-39.
    4. Liyuan Zhu & Nan Liu, 2023. "Game theoretic analysis of logistics service coordination in a live-streaming e-commerce system," Electronic Commerce Research, Springer, vol. 23(2), pages 1049-1087, June.
    5. Jili Kong & Ziyu Chen & Xiaoping Liu, 2022. "A Review of Logistics Pricing Research Based on Game Theory," Sustainability, MDPI, vol. 14(17), pages 1-20, August.
    6. Hao Liu & Haodong Chen & Hengyi Zhang & Haibin Liu & Xingwang Yu & Shiqing Zhang, 2022. "Contract Design of Logistics Service Supply Chain Based on Smart Transformation," Sustainability, MDPI, vol. 14(10), pages 1-17, May.
    7. Guangmei Cao & Yuesen Wang & Honghu Gao & Hao Liu & Haibin Liu & Zhigang Song & Yuqing Fan, 2023. "Coordination Decision-Making for Intelligent Transformation of Logistics Services under Capital Constraint," Sustainability, MDPI, vol. 15(6), pages 1-25, March.
    8. Zeng, Amy Z. & Hou, Jing, 2019. "Procurement and coordination under imperfect quality and uncertain demand in reverse mobile phone supply chain," International Journal of Production Economics, Elsevier, vol. 209(C), pages 346-359.

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