WSEAS Transactions on Mathematics
Print ISSN: 1109-2769, E-ISSN: 2224-2880
Volume 13, 2014
Contract Design for 4PL Service Supply Chain and Its Pareto Improvement
Authors: ,
Abstract: Considering the probability of the logistics business successfully completed is influenced by the effort level of 4PL and 3PL, it will cause bilateral moral risk in the case that both sides of the factors of production cannot be checked. Using the principal-agent theory, the paper discusses both sides contracts in the centralized decision and distributed decision, founding that short-term contract in distributed decision can’t make both sides realize system revenue maximization; In this paper, we develop a long-term development contract programming model to improve the system benefits by introducing earnings discount factor and designing contract on reservation revenue of 3PL which is called secondary revenue-sharing contract, where improving benefits is important. Numerical simulations are presented to show that long-term development contract programming model have good effects and verify the related conclusions.
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Pages: 22-30
WSEAS Transactions on Mathematics, ISSN / E-ISSN: 1109-2769 / 2224-2880, Volume 13, 2014, Art. #3