Research On Supplier'S Price Policies In Buyer's Market With Asymmetric Information

With the continuous development of economy, enterprises pay their attention increasingly on supply chain. And in the supply chain management, coordination is the key factor among enterprises. This paper is focused on the coordination of order and production policy between buyers and suppliers in supply chains. Firstly, in the exordium, the research purpose and the national and international researching status in this field will be presented. In the body part, sereval typical order and production models will be introduced. Then these models's problem: they assume buyers and suppliers share the completely information--it's impossible in practice, will lead the follow topic. When a buyer of an item decides independently, he will place orders based on his economic order quantity (EOQ). However, the buyer's EOQ may not lead to an optimal policy for the supplier. Should the buyer have the more powerful position to enforce his EOQ on the supplier, then no incentive exists for him to deviate from his EOQ. To provide an incentive to order in quantities suitable to the supplier, the supplier could offer a price discount or side payment. One critical assumption made throughout the literature dealing with incentive schemes to influence buyer's ordering policy is that the supplier has complete information regarding buyer's cost structure. This paper provides a bargaining model with asymmetric information about the buyer's cost structure. A self-selection model for the determination of an optimal set of contracts which are specifically designed for different cost structures of the buyer, assumed by the supplier, will be presented with the purpose of minimizing both of their cost.