An analysis of supply chain game model with a third party logistics service provider involved

Abstract

A supply chain with a Third Party Logistics (TPL) service provider involved is studied using game theory. The factor of logistics service level is considered to see the effect on the supply chain's total profit. In addition, the profit allocation problem is also discussed in the paper. Then we find out that, when supplier, retailer and TPL use the collaborative decision-making strategy, the sales volume will increase, the logistics service will be improved and the total profit will rise too. With a reasonable allocation method, supply chain members will cooperate actively to realize the Pareto improvement.