Study On The Profits Allocation Method For Virtual Supply Chain Based On Extenic Theory

Most of the traditional models are descriptive mathematic models. They assume that the profit in the future can be predicted. But, in fact, it is always difficult to get information about the cost required and the profit of the project conducted by a virtual enterprise under different cooperative status; and the criteria to establish the objective functions of these models are comparatively simple, so few of the partners can accept the solution deduced from the model. Furthermore, there is a gap between the practical status and the models, which need modifying or complementing in calculation and apportionment of total cost and in the risks evaluation. So the traditional profit allocation solutions can't be effectively applied in the practice for their limitations. This paper conducts research on the profit allocation problem based on virtual supply chain. Firstly, the paper shows the background of the advent of virtual supply chain as well as its characteristics, and then provides a referential mode. According to the mode, the total cost that may be exhausted in a virtual supply chain during the practical process is divided into several categories, and in order to get the reasonable total cost of each partner, the paper gives a pattern based on the theory of Activity Based on Cost to apportion the cooperative operation cost of virtual supply chain which has blur boundary between the partners. Secondly, a mathematic model evolved from principal-agent theory is formulated to analyses the major factors relative to cost and risk which effect the profit allocation, and proposes an equation used for calculating the profit allocation proportion to each partner. Subsequently, the equation is combined with the extenics to establish an extensive profit allocation model which can be modified dynamically or provide comparatively reasonable tactics for profits allocation according to the actual cost and risk assumed by the partners in different stage of the virtual supply chain. Finally, a rudiment design of Profit Allocation DSS is provided, which can serve as a kind of new theoretical base for implementing the profit allocation in a more formalized manner.