Decision Optimization of Four-Level Supply Chain with the Participation of Two-Echelon Logistics Service Providers under Different Power Structures

Abstract

Taking the four-level supply chain participated by two-echelon logistics service providers as the research object, this paper deeply studies the influence of different power structures on the optimal price and logistics service level decisions of the whole supply chain system. On this basis, this paper points out the optimal power structure of the whole supply chain system and then discusses the optimal cooperative decision-making mode to improve the operation efficiency of the supply chain system under optimal power structure. The results show that compared with the two power structures of manufacturer-led and logistics service integrator-led, the retailer-led structure is the optimal power structure, whether from the perspective of maximizing the total profit of the supply chain or the surplus of consumers. When the supply chain is facing consumers who are less sensitive to the retail price of products and more sensitive to the logistics service level, the advantages of retail-led decentralized supply chain are more significant. The centralized decision of product supply chain (PSC) and logistics service supply chain (LSSC) under different power structures is the dominant strategy, and the equilibrium strategy is Nash game adopted by both parties. At this time, the total profit of the supply chain system is the largest and the total social welfare is the largest, while the total profit and consumer surplus of the supply chain under LSSC-led structure are the smallest. When the supply chain is facing consumers with low sensitivity of logistics service level and product retail price, PSC and LSSC have more significant advantages in Nash game rather than Stackelberg game.