Experimental Study On The Performances Of Different Operation Modes Based On VMI

Decision makers are assumed perfect rationality in traditional Operations Management.However,this perfect rationality assumption cannot be well applied in practice.In Behavioral Operations Management(BOM),researchers focus on how the managers make decisions with bounded rationality.Among many research methods,Labrotary Experiment is a kind of common method in BOM.Furthermore,game experiment is a kind of relatively typical,common experiment,including supply chain contract,demand information forecast,capacity allocation etc.In this paper,laboratary experiment method is adopted.We study the decisions of different parts(retailer and supplier)in VMI supply chain under several operation modes(revenue sharing contract mode,contract-compensation mode).The results show that,due to the existence of behavioral preferences,the decisions of each part in supply chain deviate from the theoretical predictions under each operation mode.Furthermore,the behavioral preferences of each part are different between different operation modes,especially,the fairness concern can be eliminated by changing the operation mode.Moreover,we conduct statistical analyses on our experimental data with proper methods,and based on these results,we make more deep discussions on behaviors of retailer and supplier.We build behavioral models to fit decisions of supplier and retailer and finally get the specific results of behaviors in VMI supply chain.First of all,we design the VMI system with revenue sharing contract,which is implemented commonly in practical business.This is also a benchmark of our research,we explore the deeper reasons why VMI cannot work well in reality.We find that,under VMI system with revenue sharing contract,supplier exhibits strong fairness concern,that is,she punishes those unfair decisions of retailer(Lower replenishment quantity).And thus,the actual supply chain profit of revenue sharing contract VMI system is smaller than the theoretical prediction.On the results of revenue sharing contract VMI system,we attempt to improve our operation mode.From the literature review,we propose a contract-compensation mode,which gives retailer an opportunity to compensate some revenue after the realization of demand.The experimental data show that the contract-compensation mode can improve the supply chain performance liken to the contract mode.This result is mainly caused by eliminating the fairness concern of supplier.Supplier exihibits the ex-post inventory error regret to some degree.Moreover,compensation mode only is actually a kind of special trust game,we find that trust game in supply chain is significantly different from the traditional trust game(investment game),and based on the analysis of behavioral model,we finally confirm the existence of reciprocity of retailer.Furthermore,relationship level is an important factor influencing the implementation of VMI,and we also confirm the existence of trust and trustworthiness in the process of implementation.We design the behavioral experiment,and explore the differences and similarities under different relationship levels,and give more suggestions to VMI implementation finally.