Abstract: Incentives play an important role in the cooperation between the pivotal manufacturer and supplier in the quality control process. The pivotal manufacturer usually forms the quality awareness according to the requirement of customers before the production R&D. This paper investigates whether the incentive strategy based on this quality awareness will realize the quality control. Accordingly, a Stackelberg game model consisting of a pivotal manufacturer being the leader and its downstream supplier being the follower is established, and their optimal decisions on the efforts level and the quality level with and without incentives are discussed. The incentive strategy can be divided into two types:the incentive based on the supplier's product quality level and the pivotal manufacturer' quality awareness level. Results show that incentives are the intrinsic motivation for suppliers to promote the collaboration and the product quality. The pivotal manufacturer can further encourage suppliers to be more devoted to improving the product quality by incorporating the quality awareness into the incentive strategy, which enables both parties as well as the whole supply chain to obtain higher profits. In addition, sensitivity analysis shows that collaboration level between two parties and the quality level increase with the level of quality awareness.

Key words: complex products, quality awareness, quality control, incentive strategy, Stackelberg game