Functional Logistics Service Providers Research Articles

Research on the Emission Reduction Decision of Cost-Sharing Logistics Service Supply Chain in the O2O Model

As an effective way to realize energy savings and environmental protection, cost sharing is gradually becoming an important measure to reduce emissions in the logistics service supply chain under O2O mode in recent years. How to conduct contract selection and design optimization under the cost-sharing situation, and then improve the operational efficiency of the logistics service supply chain is an important issue that needs to be addressed. Firstly, based on the initial market demand for logistics, this paper involves the influence of both online logistics service integrators and onsite functional logistics service providers on logistics market demand in terms of emission reduction and platform brand image and develops a model based on the logistics service demand function in the O2O mode. Secondly, for the role of online and onsite emission reduction services in multi-cycle continuous cooperation to enhance the platform integrator’s brand image, a cost-sharing differential game model between online and onsite services is developed to facilitate providers’ adoption of high-quality emission reduction services. Finally, the HJB equation is used to compare the non-cooperative Nash game, the cost-sharing Stackelberg game, and the cooperative game to make the optimal abatement decision, the optimal benefit, and the cost-sharing ratio of the abatement service supply chain in the non-cooperative Nash game, the cost-sharing Stackelberg game, and the cooperative game. By comparing the results of the three games, we find that the optimal onsite and online abatement service decision is related to the cost, marginal revenue, and the impact of the service on demand; the abatement cost-sharing contract and cooperation are both better than the non-cooperative independent decision state, which can effectively guide the provision of high-quality onsite abatement service and improve the revenue of both parties involved in the logistics service supply chain and the total system’s revenue in the O2O mode. Compared with the cooperative game model, the cost-sharing contract can more effectively facilitate close cooperation between the actors, and the relationship between onsite and online marginal revenue affects the improvement of both parties’ revenue. The findings of the study can provide useful managerial insights for the selection and design optimization of abatement contracts for logistics service supply chains considering cost-sharing via the O2O model.

A Mixed Integer Linear Programming Model of Order Allocation Involving Mass Customization Logistic Service (MCLS)

In an increasing business competition, a company has to improve its competitiveness by focus more on supply chain management. One of the crucial problems in supply chain deals with the allocation of orders. More and more companies are starting to adoptMass Customization Logistics Service (MCLS) mode to determine the optimal allocations of order both from suppliers and to customized logistics services at the possible lowest cost. For this purpose, a third party is needed, namely Logistic Service Integrator (LSI) in providing logistics services. However, since LSI cannot meet all customer needs, LSI chooses to outsource logistics tasks to a Functional Logistics Service Provider (FLSP). This research was developed to help decision-makers ofmanufacturing companies in making optimal decision concerning order allocations that minimize the total supply chain costs involving Mass Customization Logistics Service (MCLS).

Operation decision of logistics service supply chain: considering interruption probability in emergencies

PurposeTo remedy the inherent defect in current research that focuses only on a single type of participants, this paper endeavors to look into the situation as an evolutionary game between a representative Logistics Service Integrator (LSI) and a representative Functional Logistics Service Provider (FLSP) in an environment with sudden crisis and tries to analyze how LSI supervises FLSP's operations and how FLSP responds in a recurrent pattern with different interruption probabilities.Design/methodology/approachRegarding the risks of supply chain interruption in emergencies, this paper develops a two-level model of single LSI and single FLSP, using Evolutionary Game theory to analyze their optimal decision-making, as well as their strategic behaviors on different risk levels regarding the interruption probability to achieve the optimal return with bounded rationality.FindingsThe results show that on a low-risk level, if LSI increases the degree of punishment, it will fail to enhance FLSP's operational activeness in the long term; when the risk rises to an intermediate level, a circular game occurs between LSI and FLSP; and on a high level of risk, FLSP will actively take actions, and its functional probability further impacts LSI's strategic choices. Finally, this paper analyzes the moderating impact of punishment intensity and social reputation loss on the evolutionary model in emergencies and provides relevant managerial implications.Originality/valueFirst, by taking both interruption probability and emergencies into consideration, this paper explores the interactions among the factors relevant to LSI's and FLSP's optimal decision-making. Second, this paper analyzes the optimal evolutionary game strategies of LSI and FLSP with different interruption probability and the range of their optimal strategies. Third, the findings of this paper provide valuable implications for relevant practices, such that the punishment intensity and social reputation loss determine the optimal strategies of LSI and FLSP, and thus it is an effective vehicle for LSSC system administrator to achieve the maximum efficiency of the system.

Selection of Functional Logistics Service Providers: AHP and DEMATEL Application

Despite the widespread establishment of logistics service providers, the largest integrated logistics service providers (ILSPs) cannot offer customers a fully customised supply chain without outsourcing some logistics functions, not their strengths, to local companies or specialised service providers. Accordingly, this study investigates the outsourcing of functional logistics activities from logistics integrators, or ILSPs, by focusing on the selection process for functional logistics service providers (FLSPs), especially on the attributes that affect the selection decision. This study uses the hybrid multiple criteria decision-making approach, the AHP-DEMATEL integrated model. The findings include the characterisation of eight main factors affecting the FLSPs’ selection decision, regarding their degree of particular importance and their reciprocal influence inside the decision-making system, from the ILSPs’ perspective. Additionally, the dominance of cost factors is emphasised through a double-analysis using the AHP and DEMATEL methods, while the importance of the remaining factors is also indicated. The final analysis results are discussed with conclusions for detailed insights. Through this study, decision-makers of ILSPs enable the review of the selection process and its standards.

An Improved Revenue Distribution Model for Logistics Service Supply Chain Considering Fairness Preference

Revenue distribution is an important issue in the operations of a logistics service supply chain (LSSC). The existing works on revenue distribution are mostly based on the assumption of rational economic people that are purely self-interested. However, people also have a fairness preference, which impacts people’s decision-making behavior or even the success operations of the LSSC. For a two-level supply chain consisting of logistics service integrator (LSI) and several functional logistics service providers (FLSP), this paper establishes an improved revenue distribution model considering FLSPs’ inequity aversion. Specifically, the BO model (abbreviation of a model proposed by Bolton and Ockenfels in 2000) is improved to describe the FLSPs’ inequity aversion, which is combined into the conventional revenue distribution model. The proposed model aims to maximize the revenue of logistics service supply chain and obtains the best revenue distribution ratio of each member under equilibrium. In the numerical cases, the impacts of inequity aversion and the number of members with inequity aversion on the revenue distribution are discussed, respectively. The results show that a higher degree of FLSP’s advantageous inequity aversion corresponds to a lower revenue distribution ratio; a higher degree of FLSP’s disadvantageous inequity aversion corresponds to a higher revenue distribution ratio. Increasing the number of FLSP members with inequity aversion results in a higher profit of LSI and lower total utility of FLSPs and the utility of the supply chain. The more FLSP members with inequity aversion there are, the higher the LSI’s profit is, and the lower the total utility of FLSPs and the utility of supply chain are. In addition, the revenue distribution ratio of the FLSP increases with its relative fairness revenue coefficient among FLSPs.

Service capacity procurement in Logistics service supply chain with demand updating and reciprocal behavior

This paper builds a logistics service supply chain consisting of a logistics service integrator (LSI) and a functional logistics service provider (FLSP), where they collaborate with a reciprocity contract. We aim to analyse the impact of reciprocity on the supply chain members' two-stage service capability procurement decisions under demand updating through a multi-method, combining game theory and a case study. We find that a reciprocity contract could provide a win-win situation and coordinate the supply chain when reciprocity factors are in an appropriate range. Moreover, the reciprocal behaviour of LSI can promote the reduction of wholesale prices, and the reciprocal behaviour of FLSP will increase the purchasing quantity as well as bring forward the purchasing time point of LSI. Lastly, the reciprocal behaviour of both parties is mutually reinforcing; that is, when one party increases its own reciprocity factor, the other party also increases its reciprocity factor as a return. [Received: 30 September 2018; Accepted: 11 February 2020]

Order allocation model in logistics service supply chain with demand updating and inequity aversion: A perspective of two option contracts comparison

<p style='text-indent:20px;'>This paper considers an logistics service supply chain consisting of a logistics service integrator (LSI) and a number of functional logistics service providers (FLSPs). In the environment of demand updating, we focus on the inequity aversion among the FLSPs and introduce two option contracts (the reservation option contract and the option guarantee contract), build the multi-objective programming models, to explore effects of the inequity aversion behavior on the order allocation, and whether the two option contracts can mitigate the impact of inequity aversion on order allocation. Three important conclusions are obtained after two option contracts comparisons: first, there is an optimal update time, at which point, the order allocation results reach the optimal value and tend to be stable. Second, two option contracts both can not only increase the total performance of the supply chain, but also mitigate the impact of inequity aversion on the allocation under certain conditions. Third, when demand decreases, the reservation option contract is better than option guarantee contract, in contrast, when demand increases, option guarantee contract is better.</p>

Service quality guarantee design: obedience behavior, demand updating and information asymmetry

With the increasingly fierce market competition and the rapid development of advanced logistics technology, service quality guarantee and demand updating become effective ways to promote procurement decisions in logistics supply chain. However, information asymmetry and obedience behavior have made it more complicated. In this paper, we considered the above factors, and studied the capacity procurement issue in a logistics service supply chain consisting of a logistics service integrator (LSI) and a functional logistics service provider (FLSP) in two periods. First, we find the optimal purchase quantities increase with the FLSP’s obedience factor, in specific conditions, the LSI’s guaranteed service quality and FLSP’s obedience behavior can reach the upper limit (or lower limit). Second, the information symmetry creates a win–win situation iff the penalty cost to the FLSP is moderate and the demand is incompletely revealed. Third, demand updating relaxes the condition for the LSI’s service quality guarantee reaching to the upper limit. For FLSP, when the penalty cost is moderate, the demand updating makes FLSP less obedient in case that the demand is completely revealed and more obedient when the demand is incompletely revealed.

Research on Logistics Service Supply Chain Information Sharing Mechanism in the Belt and Road Initiative

In the context of the Belt and Road Initiative (BRI), demand in informatization and coordinated logistics services is playing increasing attention to the frequent international trade transactions. Several authors have proposed models about supply chain information sharing focused on product supply chain to analyze the factors affecting the level of corporate information sharing and the relationship between the level of information sharing and corporate performance, etc. However, little is available to study on the decision-making issues of corporate information sharing in the service supply chain. This paper aims to reveal the possible impact of the government's infrastructure construction investment and government incentives on the logistics service supply chain in the logistics service supply chain under this theme. This paper constructs an evolutionary game model to explore the dynamic selection process of corporate information co-strategy, the logistics service supply chain composed of functional logistics service provider (FLSP) and logistics service integrator (LSI) taked as the research object. Numerical experiments show that the additional revenue of information sharing, revenue distributing coefficient, information sharing risk coefficient and the speculative income coefficient are closely to the probability of gamers' choosing information sharing; moreover, investment in government infrastructure construction is conducive to improving the initial willingness of logistics companies to implement information sharing in which the government's incentives for corporate information sharing behavior are directly proportional to the probability of logistics companies choosing information sharing. We discuss the practical implications of the proposed model, and the wider implications for improving the level of international logistics cooperation and the high-quality development of logistics enterprise informatization under the BRI.

The Revenue-sharing Model of Logistics Service Supply Chain for Online Seafood Retailing

Ye, Y., Ju, S., Fan, Y. and Bian, W., 2019. The revenue-sharing model of logistics service supply chain for online seafood retailing. In: Gong, D.; Zhu, H., and Liu, R. (eds.), Selected Topics in Coastal Research: Engineering, Industry, Economy, and Sustainable Development. Journal of Coastal Research, Special Issue No. 94, pp. 659–665. Coconut Creek (Florida), ISSN 0749-0208.From the perspective of stability and sustainability of logistics service supply chain (LSSC) for online seafood retailing, constructing a three-tier online retailing LSSC consisting of an online retailer (OR), a logistics service integrator (LSI) and a functional logistics service provider (FLSP), this paper establishes a revenue-sharing model among the three participants by using game theory.

Investigating the Impact Factors of the Logistics Service Supply Chain for Sustainable Performance: Focused on Integrators

The overall scale of China’s logistics industry is growing rapidly, and the environment and conditions for its development are constantly improving, which lays a solid foundation for further accelerating the development of the logistics industry. However, logistics services are characterized by subordination, immediacy, demand volatility, and substitutability. Low-level integrated management of logistics services seriously hinders the development of the logistics service supply chain (LSSC) for sustainable performance. Many studies have been limited to the performance evaluation of LSSCs, and the factors affecting LSSC performance have generally been ignored. This study focuses on integrated LSSCs by using an integrator’s opportunistic behavior as the entry point of research and investigates the factors that affect the sustainability of LSSC performance. On the basis of relevant theories, a model for a hypothesis is constructed and eight hypotheses are subsequently proposed. Moreover, 271 survey responses from functional logistics service providers (research object) are utilized to develop a structural equation model for empirical research. Findings show that integrators with opportunistic behavior inhibit the information-sharing behavior of supply chain members. Consequently, the integration capability and agility of LSSCs are reduced, which affects the overall performance of LSSCs. The findings of this study can provide management insights into the behaviors of supply chain members and governments.

Relationship among demand updating, decision-making behaviours and performance in logistics service supply chains: an exploratory study from China

ABSTRACTThe performance of the logistics service supply chain (LSSC) is not only affected by external demand changes, but also by the decision-making behaviours of LSSC members, including logistics service integrators (LSI) and functional logistics service providers (FLSP). This paper establishes a structural equation model for assessing the relationships among demand updating, decision-making behaviours and supply chain performance. The model is validated by questionnaire data from China using the SmartPLS method. There are many important conclusions. Firstly, demand updating acting as an intermediary variable does not have a direct impact on supply chain performance. Secondly, demand updating has a more positive impact on LSI than FLSP. Meanwhile, LSI has a positive impact on FLSP’s behaviours. Thirdly, the contribution of LSI’s behaviours towards improving the supply chain performance is only slightly greater than that of FLSP. Therefore, LSI should focus on improving its own behaviours to avoid being overtaken by FLSP.

Joint decision model of supplier selection and order allocation for the mass customization of logistics services

This paper formulates a multi-objective mixed-integer nonlinear programming model to simultaneously determine the optimal selection strategy of functional logistics service providers and the order allocation strategy under the mass customization of logistics services. An improved genetic algorithm based on multi-layer coding is designed to solve the model. Numerical experiments show that the supplier selection strategy and the order allocation strategy are mutually influential, therefore, decision makers need to consider both simultaneously to optimize the overall performance of the supply chain. The influence of some important parameters on the model results was observed through a sensitivity analysis.

Service capacity procurement of logistics service supply chain with demand updating and loss-averse preference

This paper studies the impacts of loss-averse preference on the service capacity procurement decisions with demand updating in a logistics service supply chain, which consists of one logistics service integrator and one functional logistics service provider. It starts from a basic two-stage Stackelberg game model, then, extends to three scenarios where either the integrator or the provider or neither of them has loss-averse preference. The impact of loss-averse preference on the decisions of supply chain members is discussed by comparing the four models. Our results reveal, first, the loss-averse preferences do not always affect the decisions of supply chain members. If certain conditions are satisfied, the logistics service integrator can benefit from its loss-averse preference. Second, the increased service level can affect the logistics service integrator's procurement strategy and the functional logistics service provider's pricing strategy. This effect is only related to the loss-averse preference of the functional logistics service provider. Last, under certain conditions, the total service capacity decreases with the increased service level, regardless of whether or not the supply chain members have loss-averse preferences.

The impacts of distributional and peer-induced fairness concerns on the decision-making of order allocation in logistics service supply chain

This paper investigates the order allocation of logistics service supply chain (LSSC) that consists of one logistics service integrator (LSI) and two competing functional logistics service providers (FLSPs) who participate the allocation successively. FLSPs have different fairness concerns. It is found that the optimal utility of LSI increase with the latter FLSP’s peer-induced fairness concern, and decrease with the incumbent FLSP’s distributional fairness concern. Because LSI expects FLSPs with more of peer-induced fairness concern and less of distributional fairness concern, an incentive contract is proposed which could improve LSI’s utility when the parameters meet certain conditions.

Cost Optimization Control of Logistics Service Supply Chain Based on Cloud Genetic Algorithm

As a kind of service supply chain, logistics service supply chain is an important trend in the development of logistics industry. Compared with developed countries in foreign countries, the level of logistics development in China is lagging behind. Facing the unprecedented competition pressure from foreign logistics enterprises, how to realize the construction and operation with high quality and low cost in logistics service supply chain is one of the key problems at present. Quality cost is the cross field of quality management and cost control, and its function has been widely verified at home and abroad. Therefore, through the research and analysis of the quality cost, the construction and cost optimization method of logistics service supply chain based on cloud genetic algorithm is proposed. The quality cost theory is applied to the related research of logistics service supply chain to realize the integration between integrated logistics service providers and functional logistics service providers with high quality and low cost. At the same time, it can provide the basis and means for quality management and cost control in the long-term operation of logistics service supply chain. Finally, the effectiveness of quality cost in the construction and operation optimization of logistics service supply chain is verified through the case of S Company.

Altruistic preference for investment decisions in the logistics service supply chain

In order to obtain the feasible condition that both the logistics service integrator (LSI) and functional logistics service provider (FLSP) have altruistic preferences, this paper establishes four investment decision models with Stackelberg game. It is found that supply chain coordination can not be achieved when both the LSI and FLSP have altruistic preferences, then the ex-post payment contract and 'revenue sharing + franchise fee' contract are proposed to solve this problem. Some important conclusions are found. First, when both the LSI and FLSP have altruistic preferences, the utilities of LSI and FLSP are higher than the utilities when only the LSI or FLSP has an altruistic preference. Second, both contracts can increase the utilities of LSI and FLSP when the range of altruistic preference coefficients meets a specific constraint. Third, when the LSI's altruistic preference degree is equal to the FLSP's altruistic preference degree, the supply chain profit can reach the highest level. [Received 1 October 2017; Revised 3 October 2017; Accepted 15 April 2018]

The impacts of logistics service integrator's overconfidence behaviour on supply chain decision under demand surge

This paper studies a two-echelon logistics service supply chain (LSSC) composed of one logistics service integrator (LSI) and one functional logistics service provider (FLSP). We develop a two-period service capacity procurement model where market demand surges in the second period. The LSI, as the Stackelberg game leader, tends to be overconfident when market demand surges. The results show that when the demand surges in the second period, if the overconfident purchasing capacity of LSI cannot meet the market demand, the overconfidence behaviour will negatively affect LSI's optimal pricing. Besides, the overconfidence behaviour leads to the lowest service level of the FLSP in the second period under demand surge. However, such negative impacts can be reduced or even eliminated in certain conditions through the FLSP-led mechanism and the dynamic wholesale price mechanism. The numerical simulation and the case study from China are used to illustrate the model and draw some conclusions. [Received 17 August 2017; Revised 19 February 2018; Accepted 30 March 2018]

The impacts of logistics service integrator's overconfidence behaviour on supply chain decision under demand surge

This paper studies a two-echelon logistics service supply chain (LSSC) composed of one logistics service integrator (LSI) and one functional logistics service provider (FLSP). We develop a two-period service capacity procurement model where market demand surges in the second period. The LSI, as the Stackelberg game leader, tends to be overconfident when market demand surges. The results show that when the demand surges in the second period, if the overconfident purchasing capacity of LSI cannot meet the market demand, the overconfidence behaviour will negatively affect LSI's optimal pricing. Besides, the overconfidence behaviour leads to the lowest service level of the FLSP in the second period under demand surge. However, such negative impacts can be reduced or even eliminated in certain conditions through the FLSP-led mechanism and the dynamic wholesale price mechanism. The numerical simulation and the case study from China are used to illustrate the model and draw some conclusions. [Received 17 August 2017; Revised 19 February 2018; Accepted 30 March 2018]

Capacity Procurement in Logistics Service Supply Chain with Demand Updating and Rational Expectation Behavior

This paper discusses the applicable conditions of two capacity procurement sub-strategies with two ordering opportunities, namely, sub-strategy I in which only increasing purchase quantity is allowed during the second ordering opportunity, and sub-strategy II in which either increasing or reducing order quantities is possible when the second order is placed. Our research is in the context of a logistics service supply chain (LSSC) consisted of a logistics service integrator (LSI) and a functional logistics service provider (FLSP). LSI purchases first a service capacity from FLSP long before demand is realized and then adjusts this ordering quantity based on demand updating. We developed the profit models for LSI and FLSP which also include the constraints of rational expectations. Based on the assumption of Bayesian updating, this paper investigates the conditions for sub-strategy II outperforming sub-strategy I. The main results are verified through numerical analysis. Counter-intuitively, sub-strategy II is not necessarily always better than sub-strategy I. When using sub-strategy II, LSI needs to purchase more service the first time of placing orders, but the expected profits increase for both LSI and FLSP only with certain conditions, which have been derived as propositions in this paper.