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Chinese Journal of Management Science ›› 2014, Vol. 22 ›› Issue (9): 98-105.

• Articles • Previous Articles     Next Articles

The Optimal Cost-Sharing Incentive Strategy of Main Manufacturer-Suppliers for Complex Product

CHEN Hong-zhuan, FANG Zhi-geng, LIU Si-feng, HE Li-fang   

  1. College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China
  • Received:2012-07-26 Revised:2013-05-12 Online:2014-09-20 Published:2014-09-27

Abstract: At present, the "main manufacturer-suppliers" collaborative model becomes the main production model of complex products. Compared with the traditional collaborative model, the "main manufacturer-suppliers" collaborative model pays more attention on supplier's effort level rather than cooperation stimulation between manufacturers and suppliers. The effort level of suppliers determines the level of complex production's production quality and efficiency. In order to promote the effort level of supplies and establish the long-term strategic partner, some research are conducted as follows: to design the parameters of effort level and propose the motivation strategy which involve the effort cost-sharing issue between the manufacture and suppliers; to establish the optimal cost-sharing model based on the effort level of suppliers; to discuss the motivation model under the two kinds of structure (Nash equilibrium and Stackelberg equilibrium). According to the cost-sharing issues between the manufacture and suppliers,the optimal cost-sharing ratio, optimal effort level and optimal reward are given. Results show that, when the effort level is equal or greater than the effort threshold value, the main manufacturer need to share the effort cost of the suppliers. On this occasion, there exists the optimal cost-sharing ratio. At the same time, the size of cost-sharing, influenced by unit gain coefficient and effort gain influence coefficient, is proportional to the square of the effort level of suppliers. Meanwhile, when the suppliers adopt the optimal effort strategy, they can achieve the optimal performance. In the meantime, this study shows that under the "main manufacturer -suppliers" collaborative model, Stackelberg equilibrium game which contains the master-slave relationship is superior to Nash equilibrium game. Furthering study by examples shows that the main manufacturer can adopt the motivation strategy about cost-sharing of suppliers to stimulate the effort level of suppliers and ensure the both sides' benefit growth so that they can achieve the pareto improvement. This article reveals the optimal cost-sharing issue about the main manufacturer stimulating the suppliers systematically, and it has an important guiding significance for the long-term strategic cooperation between the main manufacturer and suppliers of complex products.

Key words: main manufacturer-suppliers, the cost-sharing, Nash equilibrium, Stackelberg equilibrium

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