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Supply Chain Incentives and Competition Strategy Based on the Product Safety Responsibility

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  • 1. School of Economics Management, Southwest University of Science and Technology, Mianyang 621010, China;
    2. School of Economics and Management, University of Electronic Science and Technology of China, Chengdu 610054, China

Received date: 2016-03-02

  Revised date: 2016-07-17

  Online published: 2018-05-24

Abstract

The problem of product safety responsibility arising from any node enterprise will spread throughout the entire supply chain,which will affect the performance of other related interest entities and the whole supply chain. In order to deal with this challenge problem, supply chain managers must strategically take PSR strategies to affect stakeholders to improve its performance. In this paper, the conflict coordination of supply chain and market share competition are not considered. Only game theory is used to compare and analyze the equilibrium results of the game model of the supply chain in four scenarios based on wholesale price contract:"noncompetitive and non incentives coordination","noncompetitive and incentives coordination", "competition and non incentives coordination" and "competition and incentives coordination". The basic ideas of the study are as follows:First, the basic assumptions of the model are put forward; Secondly, the game model of the supply chain is constructed and solved in four scenarios; Finally, using example simulation to compare and analyze the equilibrium product safety responsibility, equilibrium market demand, equilibrium expected return of the supply chain in four scenarios, and analyzes the influence of the incentives level and the degree of competition to the equilibrium product safety responsibility, equilibrium market demand, and equilibrium expected return.The results show that proper wholesale price incentives coordination can promote manufacture's product safety responsibility level, market demand and the expected revenue of supply chain and its participants. But excessive incentives will reduce market demand and distributor's expected return, and then block the increasing of the total expected revenue of supply chain. Competition will decrease market demand and the expected revenue of supply chain and its participants. Competition will reduce manufacture's product safety responsibility level when low motivation, Competition will enhance manufacture's product safety responsibility level when high motivation.Adopting wholesale price contract incentives coordination, can strengthen competitiveness of supply chain, but excessive competition will reduce manufacture's product safety responsibility level, and thendamage the benefit of supply chain and its participants. The equilibrium results of game model has carried on the example simulation in this paper on the basis of the introduction of Erie and Mengniu competition cases. Research results enrich the decision-making theory of supply chain, which provides a strong theoretical support and method reference for scholars to study the issue of product safety responsibility in the supply chain, and be able to provide an important guide for product safety responsibility management practices in food and drug supply chain.

Cite this article

MENG Jiong, TANG Xiao-wo, NI De-bing . Supply Chain Incentives and Competition Strategy Based on the Product Safety Responsibility[J]. Chinese Journal of Management Science, 2018 , 26(3) : 84 -93 . DOI: 10.16381/j.cnki.issn1003-207x.2018.03.009

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