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Chinese Journal of Management Science ›› 2025, Vol. 33 ›› Issue (12): 214-225.doi: 10.16381/j.cnki.issn1003-207x.2023.0143

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Research on Multi-sourcing Procurement Model and Procurement Pricing Decision of Emergency Materials under Dual Reserves of Physical Goods and Production Capacity

Lin Zhang1(), Jun Tian2   

  1. 1.School of Business Administration,Dongbei University of Finance and Economics,Dalian 116025,China
    2.School of Management,Xi’an Jiaotong University,Xi’an 710049,China
  • Received:2023-01-30 Revised:2023-06-15 Online:2025-12-25 Published:2025-12-25
  • Contact: Lin Zhang E-mail:dclzhang@dufe.edu.cn

Abstract:

Jointly reserving emergency supplies by government and enterprises is an inevitable measure to improve the government's ability to respond to emergencies. In order to implement emergency material reserve and supply agreement cooperation, the government and enterprises need to jointly solve some practical problems. On the one hand, for the government, enterprises participating in emergency material supply agreement cooperation will face risks and cost pressures brought about by demand uncertainty. Correspondingly, guiding enterprises to participate in agreement cooperation has become the primary issue that the government needs to solve. Furthermore, in order to ensure the supply capacity of emergency supplies, government emergency management departments usually establish (or need to establish) cooperative relationships with multiple enterprises. Correspondingly, how to establish cooperative relationships with numerous enterprises in an efficient and fair way has become a key challenge that the government urgently needs to solve.On the other hand, for agreement enterprises, participating in emergency material supply agreements means facing uncertainty in the demand for emergency materials. Correspondingly, how much and in what form (physical products and production capacity) to reserve will inevitably become important decisions for enterprises to reduce the risks and increase the benefits of agreement cooperation. These decisions will also have an impact on the cost and benefits of the government authority when establishing the social emergency material reserve capacity.Aiming to address the above-mentioned issues, a cooperation model between the government and several emergency material production enterprises is built based on quantity flexibility contract. Government flexible procurement pricing decisions are analyzed under the situation that enterprises can reduce the agreement cooperation cost by coordinating the physical reserves and the production capacity reserves. At the same time, the enterprises’ flexible supply quantity decisions and the physical reserve quantity decisions are studied. Based on the Stackelberg game led by the government authority, the enterprises’ decisions are first analyzed, followed by the government’s decisions. Numerical examples are also used to find more properties.Several key findings are proposed. First, under the principle of cooperative fairness, with the increase of the government's regular reserves quantity, the government will alternately increase the level of flexible procurement prices for different enterprises. Second, enterprises need to make decisions based on their production cost/efficiency level among all agreement partners from a system perspective. Third, even if the reserve materials are highly likely to be purchased by the government, the agreement enterprises should actively use the production capacity reserve method instead of maintaining excessive physical reserves.From the theoretical perspective, it enriches the research results of emergency material procurement management from the perspectives of the number of contracted enterprises, the diversity of reserve types and the fairness of cooperation. From the practical perspective, theory-based decisions and managerial insights can be provided for the government authority to economically increase the social reserve capacity from a broader perspective. At the meantime, the enterprises can also learn how to makedecision for decreasing the risks and costs when joining in the social reserve system.

Key words: emergency materials, multiple sourcing, procurement pricing, physical reserves, production capacity reserves

CLC Number: