Research On Supply Chain Coordination And Optimization Contracts Based On Computational Experiment

The complexity during coordination and optimization in supply chain using contracts emergence some complex system behavior and cause difficult when formulate effective contract coordination programs. Simultaneously, it requests the researcher and the manager should translate concept and way with paying more attention to the complexity which caused by interactive behavior between multiply participants. Computational experiments show superior on the research of behaviors, emergency, and the relation between micro-level and macro-level systems. As a typical complex social economy system, the supply chains are a suitable research area to the method of computational experiments which to be a good way for solving its complexity. This paper studied supply chain coordination and optimization contracts based on computational experiment and the qualitative quantitative method. The main conclusion included:(1) The problem of supply chain coordination and optimization with contracts is a complex systematic issue leads by human with which numerous elements, different levels, complex relationship, and multi-objectives, will lead question understanding and the solution should consider the thought and the method of system management and complexity management.(2) This paper focuses on the manufacturer how use contract menu which contained wholesale price contract and revenue sharing contract to incentive multiple suppliers to improve accessories quality. The manufacturer requires suppliers’ accessories quality must be measured up and takes revenue sharing contract as incentive mechanism for quality improvement. We found that manufacturer can achieve its income and quality of accessories "win-win" by setting compensation structure reasonably. Then, we studied the impact of fairness preference which existing in suppliers group on the incentive efficiency. Research shows that:the compensation structure which performed well in group which has no fairness preference can not keep high efficiency when applied to incentive suppliers who have fairness preference, which has negative effects on incentive performance. Any compensation structure which manufacturer adopted can not maintain its primary efficiency when existing fairness preference; only adjust a single incentive factor or neglect the synergy between incentive factors can not achieve a high incentive efficiency.(3) In this paper, we consider a supply chain network consisted of multiple suppliers and multiple retailers that its structure can be changed. Fully considering the vertical and horizontal competition in the network, at first we analyze the supply chain network competition performance in three scenarios:all suppliers (coordinated scenario) or part of suppliers (hybrid scenario) or none of suppliers (uncoordinated scenario) adopted coordination policy. The main conclusions are:When the demand associated with the retail price which is decided by the retailer independently, perfect coordination can not be obtained for the buy back contract of supply chain network in competitive environment, but it is able to improve supply chain performance and increase the earnings stability to some extent. The members in network all have incentives to use buy back contract. However, when the retail price of retailers fixed, we show that coordination policy is a dominant strategy for each retailer and supply chain that used. True cost of changing suppliers by retailers will affect the vendors’ income and the enthusiasm of adopting the coordinated strategy. The suppliers should be reallocated benefits generated from coordination policy by adjusting the contract parameters. In addition, we also investigate the impact of market demand uncertainty on the benefits of agents in different scenarios. The greater the degree of uncertainty in market demand, the better coordination with return policy.(4) This paper builds an experimental model that the manufacturer incentive sales efforts of retailers’group through sales rebate and penalty contract. Retailers are unfairness aversion. We research the impact of unfairness aversion preference on the incentive effects, study the impact of external effects among retailers on the incentive effects, and apply the EWA algorithm to manufacturer for adjusting the incentives and penalties dynamically to maximize its own benefits. The aim of this paper is to provide suggestions to manufacturer make rewards and punishment and use the external effects among retailers reasonably in multi-cycle periods. The results show that:retailers’unfairness aversion will have a negative impact on the incentive effects; the higher sales target manufacturer set, the greater negative impact; once the retailer’s sales less than target volume and be punished, it will lead to path dependence which the retailer reduce sales effort, so induce manufacturer lower profits. The manufacturer should pay more attention to retailers’ unfairness aversion in encouraging process; The manufacturer should take steps to minimize the retailers "free ride" behavior, but not to eliminate this behavior completely; the manufacturer adopt the dynamic incentives will be better than the static incentives in multi-cycle incentive periods. Dynamic adjustment of rewards and punishment will greatly affect the level of the average sale efforts of retailers who have been incentive, but do not affect the evolution trends of sale efforts of retailers who have been punished.(5) In order to solve the competitive problems of supply chain in reality, this paper considered the effects of the vertical and horizontal competition between supply chains, constructed four three-level supply chains based on different types of combined contracts under demand uncertainty through computation experiments. We analyzed the impact of the consumer price preferences, service preferences and demand uncertainty on the competitive performance of the relevant members under the different combined contracts by the indicators of the profit mean and the earnings stability. The objective of this paper is to provide some suggestions that how the multi-level supply-chains to choose the appropriate types of combined contracts in complex market environment. Simulation results indicate that the combined contracts have no significant impact on the overall profit or the earnings stability of the supply chain, but different coordination mechanisms have different effects impact on the size and the stability of member’s profit.