Research On Bilevel Programming And Its Application In Telecom Supply Chain Coordination

With the reorganization of telecom industry and the issuance of 3G licenses, China will entrance the age of 3G where contents are the main business. The value-added services of mobile Internet will be vigorous, at the same time, the competition will be unprecedented intense. Meanwhile, the competition between individual enterprises will transfer to the competition between the supply chains. Therefore, it is significant to discuss how telecom operators deal with the supply chain competition and choose the proper way to cooperate with new value-added service providers in order to obtain greater profits. At the same time, telecom operators should review the profit mode to adapt the reality, where is full of asymmetry information and complex relationship between enterprises in the supply chain because of double marginalization.On the other hand, there is a wide range of competition and cooperation in economic activities. When people make a decision, they not only consider their own situation, but also take the competitors' situation and response into account. And on the decision, the decision-makers usually are on different level and have their own profit function, so the decision results affect each other and constraint mutually. The bi-level programming theory which studying the level issue has been developed from Stackelberg, and become a hot research field. Many scholars have used bi-level programming to study the supply chain which has clear-cut level characters recently, while the level characters of the telecom supply chain are complex, and it is a difficult problem to construct the telecom supply chain model to meet the bi-level programming theory.Based on the two issues before, this paper will combine the contract coordination theory and bi-level programming theory to study the value-added service supply chains coordination of telecom supply chain, which focuse on the parameters of the decision-making power between operators and value-added service providers, such as pricing, the proportion of revenue. Then analyze the effects of bi-level programming to the supply chain coordination. The main contents are concluded as follows:Firstly: On the base of researching the telecom supply chain model and its characters, the feasibility of applying the supply chain contract coordination theory and bi-level programming theory to the telecom supply chain is discussed.Secondly: Studying several intelligent algorithms which are commonly used to solving the non-linear programming, two types of hybrid intelligent algorithm are proposed, and the algorithms are proved effectively by internationally recognized test function, then the algorithm to solve the bi-level programming based on the hybrid intelligent algorithm is put forward, which considered the decision-making order between the competitors in the same levels.Thirdly: Aiming at the telecom supply chain especially the value-added services supply chain in the 3G era, with revenue sharing contract, the color ring service supply chain is modeled and simulated, the "single-multi" bi-level programming model which there is one color ring provider in the leader level and several telecom operators in the follower level, or one telecom operator in leader level and several color ring providers in follower level is discussed. Then the situation of the non-cooperative competition, cooperation, collusion, and principal prevented collusion between agents in follower level are analyzed. Furthermore, on the basis of researching the current models and process, the improved models are proposed and simulated.With considering the demands affected by the price and promote efforts degree, the "single-multi" model is modeled and the simulation results show that: The preponderant firms (whatever telecom operators or SP) will take full advantage of their own superiority to squeeze the maximum profit in the supply chain, and only give the secondary firms the basic profit which make the firms participate in; in the situation of having multiple agents in follower level, the earlier actor earn more profit than latter actor, and more profit can be obtained by cooperation (collusion), while the leader loses; the total profit of the supply chain obtained by the model of bi-level programming is between the decentralized and integrated supply chain's profit, which is the reason why the supply chain modeled by the bi-level programming can be applied broadly in the stage of having difficulty to implement the integrated supply chain.Fourthly: The situation of having multiple service providers and multiple telecom operators is researched firstly, and then the situation that there are multiple service providers in the follower and leader level respectively modeled and simulated by the algorithm which proposed in the second works.The "multi-single", "multi-multi" telecom supply chain models simulation results show that: On the effects of double-marginalization, the firm will take full use of the advantages to maximize its own profit regardless of the related participators' profits; the same firm in different level have different profits, and in the same level, the earlier actor has more profit than latter actor; the telecom supply chain at present is not coordination yet, and the communication fee has downward space; in the situation of asymmetry information and double-marginalization, the bi-level programming model with supply chain contract can coordinate the supply chain better.