Abstract
Incorporating the impact of the COVID-19 pandemic on the mask supply chain into our framework and taking mask output as a state variable, our study introduces the differential game to study the long-term dynamic cooperation of a two-echelon supply chain composed of the supplier and the manufacturer under government subsidies. The study elaborates that government subsidies can provide more effective incentives for supply chain members to cooperate in the production of masks compared with the situation of no government subsidies. A relatively low wholesale price can effectively increase the profits of supply chain members and the supply chain system. The joint contract of two-way cost-sharing contract and transfer payment contract can promote production technology investment efforts of the supply chain members, the optimum trajectory of mask production, and total profit to reach the best state as the centralized decision scenario within a certain range. Meanwhile, it is determined that the profits of supply chain members in the joint contract can be Pareto improvement compared with decentralized decision scenario. With the increase of production technology investment cost coefficients and output self-decay rate, mask outputs have shown a downward trend in the joint contract decision model. On the contrary, mask outputs would rise with growing sensitivity of mask output to production technology investment effort and increasing sensitivity of mask demand to mask output.
Highlights
The COVID-19 pandemic has had a massive impact on life safety and the global economy since its outbreak at the end of 2019
As there is a double marginal effect, our study proposes a joint contract to increase the production enthusiasm of supply chain members based on the decentralized decision scenario
Considering that mask production volume is affected by the sensitivity coefficient of production technology investment effort, and mask demand is affected by market prices and production volume, differential game models are constructed for the centralized decision model, the decentralized decision model, and the joint contract decision model
Summary
The COVID-19 pandemic has had a massive impact on life safety and the global economy since its outbreak at the end of 2019. Organization) reported a total of 64,603,428 confirmed cases worldwide on 4 December 2020, and a total of 1,500,614 people succumbed to COVID-19. COVID-19 prevention and control have achieved initial success, the black swan event makes medical protection supplies demand to show a blowout situation. In the COVID-19 pandemic, no country can survive alone. It is essential to replenish health emergency supplies such as medical material and personal protective equipment (PPE) for pandemic preparedness and prevention. It is important to strengthen emergency supply chain elasticity for rapid expansion and conversion. We need to make effective coordination decisions to safeguard a stable, reliable, and rapid supply of health emergency supplies
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