Cooperative Supply Chain Management under Asymmetric Information

Abstract

This study investigates supply chain cooperative management problem. In this study, based on principal-agent, firstlywe analyses cooperative management factors in supply chain including leading enterprise expected utilities,subsidiary enterprise expected incomes and leading enterprise agency cost, then the incentive contract model isconstructed; Secondly the model is solved in the case of symmetric information and asymmetric information; At last, inorder to make clear of the model, this paper does mathematical analysis of leading enterprise expected utilities,subsidiary enterprise expected incomes and leading enterprise agency cost. Some important conclusions areobtained: subsidiary enterprise ability, cost coefficient, absolute risk aversion factor and output variance has the sameinfluence on leading enterprise expected utilities and subsidiary enterprise expected incomes; subsidiary enterpriseability, cost coefficient has the same influence on leading enterprise expected utilities, subsidiary enterprise expectedincomes and leading enterprise agency cost; leading enterprise expected utilities and subsidiary enterprise expectedincomes become bigger and bigger, but leading enterprise agency cost becomes smaller and smaller with absoluterisk aversion factor and output variance decreased. etc. Leading enterprise can take on incentive measures(improving subsidiary enterprise ability, decreasing subsidiary enterprise cost coefficient.etc) to optimize supply chainmanagement based on the common factors.