The Analasis Of Incentive-Restriction Mechanism In Third-Party Logistics Cooperation

The Third Party Logistics (3PL or TPL) plays a significant role in the optimization of resources allocation and the enhancement of the economic operation as "the third source of profit". Although logistics industry in China has enter a period of rapid development, the level of third party cooperation is low, and the inefficient management of the 3PL contract is one of the most important causes.In this paper we deal with the problem of incentive-restriction mechanism design and the validity of the contract management and other factors, which influence the success or failure of the cooperation.First, such influential factors as the level of industry development, asymmetry information, and the disadvantageous law system and credit circumstance are enumerated. Then some suggestions are put forward to overcome the forenamed handicaps and optimize the 3PL cooperation.Afterwards, the paying- function in the cooperation is analyzed. Under the hypotheses set beforehand, the paper takes the average value of the industry as paying criterion base on the market and price mechanism. The punishing function is introduced in this stage too. Then the Principal -Agent mode of the 3PL cooperation is set up, and the building of Incentive -Restriction mechanism(including Participation Constraint and Incentive-Compatibility Constraint) and its influence on the utilities of both sides and the whole are proved. After that the equilibrium and adjustment of the contract in long-term cooperation is discussed with the application of Repeated-Gaming theory. It's proved that with such mechanism, the demander achieves his business goal and optimal profit, and the service supplier receives his expectation of revenue. At the same time, the integral utility reaches the maximum.Finally, the paper makes a brief introduction of the decision-making process of outsourcing and also the contracting and implements phases from the standpoint ofthe service demander. Besides, in this part, the author emphasizes the details which the demander should pay great intention to.