Abstract: With the development of modern logistics, enterprises usually outsource some of their business such as procurement to the third-party logistics service provider. They make the third-party logistics service provider share the risk of uncertainty with them, and thus they can devote themselves to developing their own core business. This has become a approach and trend for the enterprise to participate in the fierce market competition. In addition, during the procurement, as the product cycle is shortened, many enterprises are increasingly tending to use the option contract to avoid the procurement risk, and it makes the option contract more and more widely applied in the supply chain. Therefore, considering the fact that the third-party logistics (3PL) participates in managing the supply chain of the enterprise is of greater realistic and theoretical significance. However, the existing literatures seldom consider the problem of 3PL jointly deciding the procurement quantity and service cost under the abovementioned assumption. On the basis of this point, in this paper, the model for a 3PL is explored to apply the option contract to manage the procurement and the model for a supplier to manage the procurement when a supplier and a 3PL form a supply chain and build the random demand respectively, and the game theory is applied to solve the equilibrium solution for the supplier and 3PL under the abovementioned conditions. Research has shown that, only under certain conditions can 3PL-managed procurement improve the profit for the retailer, 3PL and supply chain system, and only when the risk is high can the retailer own the first-mover advantage. Besides, when 3PL gives a relatively small compensation proportion to the retailer, the retailer will choose to manage the procurement by itself and be subject to the 3PL-oriented decision. As the profit of the 3PL is higher than that of the retailer-oriented decision at this time, the 3Pl will accept this strategy. The conclusion from this paper will enrich the literatures of 3PL research and be of some guiding significance to the practical operation of the retailer and 3PL.

Key words: third party logistics, procurement outsourcing, option contract, stochastic demand