Research On Decision And Coordination Of Retail Logistics Outsoucing Supply-Chain With Competition

Nowadays the logistics outsourcing is an important section in the competition and revolution of retailer's omni-channel. With the development of internet and the globalization, the competition among enterprises is becoming increasingly fierce, making the supply chain structure more and more complex, which put forward chanllenges to the supply chain management. The product market's demand depends on product price and logistics service which is a typical feature of retail logistics supply chain, while the market competition intensity and demand sensitivity exert great impact on the choice of supply chain structure.Under this background, we study questions related to operation management of the supply chain which contains several competing TPLSPs and one retailer, as well as the supply chains that compete with each other. By the description of the behavior of the retailer who distributes demand to the TPLSPs and the market allocation mechanism, we reveal the characteristics of equilibrium decisions which made by the members of supply chain, and discuss how the entities choose the supply chain structure and the contract. Our works provide theoretical basis and practical guidance for decision makers. The main contents are as follows:(1)Facing end customers who are sensitive to both retail price and logistics service, we analyze the supply chain structure choice and allocation mechanism of retail logistics outsourcing and consider the retailer who outsources the logistics to multiple symmetric TPLSPs who compete on price and service level, allocation function and demand function are described by attraction model. We find that when TPLSPs compete for the market share only with logistics service level, the TPLSPs can be incentive to improve the logistics service level by the competition mechanism. However, an interesting result shows that both the price and service level of TPLSPs decrease when the TPLSPs compete the market share on both logistics price and service level, which makes the retailer difficult to determine the outsourcing strategy. We found that the sensitivity of market demand to retail price and logistics service is the key factor which determine the retailer who introduce competition in logistics outsourcing. we studied the impact of the number of TPLSPs on the retailer's performance in the competitive setting, we found that while service level decreases as the number of TPLSPs increases, but the equilibrium logistics price does not change. Overall, the retail's profit is decreasing with the number of TPLSPs, suggesting that the retailer prefer to dual-source instead of multisourcing. In the dual-source setting, we derived the optimal allocation function.(2) To study the price and service competition of TPLSP impact on the supply chain structure of retailer logistics outsourcing, for the supply chain consisting of two competing TPLSPs and one retailer, and the competition strategies are put forward to meet different customer demand characteristics. A game-theoretic framework is applied to obtain the equilibrium solutions for every entity. This article studies and compares results from three possible supply chain scenarios,(1) Retailer Stackelberg,(2) TPLSP Stackelberg,(3) Vertical Nash.The study found that the someone dominates the supply chain always better than no one dominates it. But the other two strategies are either advantage substitution or Complementary advantages under difference parameter of market demand. Three kind of customer segmentation are classified: The economical customer, timeliness customer and affordable customer, the corresponding strategies are given which makes the enterprises have better market opportunities and improve the advantage in competition.(3)Based on the price and logistics service level competiton simultaneously, we studied the coordination mechanism selection between two competing supply chains each contains one TPLSP and one retailer. Considering the customer are sensitive to both retail price and logistics service level, we compared the equilibrium solutions and profit of three scenarios: coordinated scenario, uncoordinated scenario, hybrid scenario(only one supply chain adopts coordination strategy).We show that the coordinating decisions is a dominant strategy for both supply chains, but both supply chains are often worse off under the coordinated scenario relative to the uncoordinated scenario when the sensitive parameter of market demand is low, coordinated scenario obtains win-win when the sensitive parameter of market demand is high, the compare results and threshold of sensitive parameter are given quantitatively.(4) Furthermore, among the chain to chain competition of retail logistics outsourcing, we suppose the products of two supply chain are heterogeneity and substitutability. Base on the competition of product price, we compare the equilibrium and performance of the Participants in the supply chain with two types of vertical contracts: quantity discount contract and wholesale price contract. The result shows that: more sophisticated contracts enable the TPLSP to coordinate the supply chain competition, thereby improve the performance available to the TPLSP and the whole supply chain. TPLSPs prefer quantity discount contract when the products are not close substitutes, otherwise, wholesale price contract is better than the quantity discount contract for the TPLSPs. The supply chain profits have the same characteristics when TPLSPs are economies of scale. When TPLSP's diseconomies of scale exist, the quantity discount contract is always better than wholesale price contract for the supply chain performance.