Study on the quantity coordination of capability collaboration for multi-period- oriented two-echelon logistics service supply chain

Abstract

With the increasingly competitive market environment nowadays, the uncertainty of customer demand has been raised step by step; meanwhile, in order to build up more close supply chain partnership, the collaboration of logistics service supply chain (LSSC) presents multiply periodic features. Consequently, the study on the quantity coordination of capability collaboration for multi-period-oriented LSSC under uncertain conditions would have more practical significance compared with that of single-period. By considering the two-echelon supply chain structure within multiply period consisting of a functional logistics service provider (FLSP) and a logistics services integrator (LSI), this paper proposed the LSI’s cost function and the FLSP’s profits function under stochastic conditions, and established the multi-period capability quantity coordination model with Stackelberg decision-making. With the software Matlab7.0, numerical simulation was conducted, and the parameters among three collaboration strategies and two LSI decision modes were compared. The results indicated that under multiply periodic conditions, the optimal collaboration strategy was that the satisfaction degree for the initial capability of the providers was higher than the standardized satisfaction value set by LSI, at this time the LSI should take rapid decision mode, and reduce the unit penalty value so as to decrease the LSI’s cost and increase FLSP’s profit. Key words: Logistics service supply chain (LSSC), two-echelon collaboration, quantity coordination, multi-period, uncertainty.