Effect Analysis of Service Supply Chain with Dynamic Game under the Condition of Sensitive Demand

Guanglan Zhou,Chunhua Ju

doi:10.1155/2015/278094

Abstract

Under the real circumstances of service supply chain, there is one demand appearing as the sensitive feature, to face the increasing uncertainty. It could be elaborated upon the decision variables such as price, quantity, and efforts. The member behaviors are operated and coordinated in the process of multiperiod dynamic game. Based on the multiperiod dynamic game theory, the service demand and price, quantity of goods, and efforts of members in the secondary service supply chain are considered. The paper discusses the reputation effect and ratchet effect in the multiperiod dynamic game service supply chain. Additionally, the paper describes this problem, builds a programming model based on the multiperiod dynamic game, and deduces the optimal solution. Furthermore, the paper analyzes the impact of reputation effect and ratchet effect on the agent’s revenue. Through the simulation, it is found that the agency efforts are a combination result of reputation effect and ratchet effect in the process of multiperiod dynamic game. Through the long-term dynamic game, the short-term moral risk in service supply chain can be restrained so that the result under the asymmetric information is the same as that under the complete information.

Highlights

Service supply chain with dynamic game in academia is a topic of growing importance
We can find that the bigger the revenue sharing coefficient Φ∗t+1 is in the stage, the lower the agency efforts will be in this stage
At the same time, when the agent’s bargaining power is stronger, and the values of management ability (γ), discount factor (δ), and τ are larger, the agent will reduce agency efforts because its result is that the ratchet effect is obvious, which can achieve the goal of concealing its ability

Summary

Introduction

Service supply chain with dynamic game in academia is a topic of growing importance. In the field of international logistics, these significant characteristics of member behaviors are often mentioned and further elaborated on, such as long-term and dynamic game. The current service level affects the decision of that in period, while the effort level of the logistics service provider and agent affects the market demand. This paper will discuss the multiperiod problem in sensitive (such as demand and prices, quantity, and efforts) service supply chain management from the time perspective of service supply chain. The original contribution is that the agency efforts are a combination result of reputation effect and ratchet effect. The short-term moral risk in service supply chain can be restrained through the long-term dynamic game

Literature Review

The Description of Service Supply Chain with Dynamic Game Model

Programming Equation

Effect Analysis of Reputation Effect and Ratchet Effect

Conclusion