Study On Coordination Strategies And Incentive Mechanism In Global Supply Chain

With the rapid development of information technology and acceleration of technological change, economic globalization, the most remarkable characteristic of which is production globalization, has become the most outstanding tendency of current economic activities in the world. By means of the establishment of global supply chain(GSC), enterprises can choose business partners globally which can help them achieve the optimal global resource allocation.As to obtain operation optimization, enterprises participating in GSC should properly handle the cooperation among business partners. Therefore, coordination comes up to be one of the most important components of GSC for better operational performance.In this study, we first review the background of GSC and explain the development of GSC by using the theory of Comparative Advantage, Economies of Scale and Competitive Advantage. Based on these concepts above, we discuss the reasons for GSC coordination and the definition of GSC coordination is given. GSC coordination strategies can be carried out in different ways, such as the Strategy of Cooperated Partners, the Strategy of Information Sharing and the Strategy of Incentive Mechanism. Secondly, by using Game Theory and Principle-agent Theory, an Incentive Mechanism Model is established to carry out in-depth study in Strategy of Incentive Mechanism. According to the characteristics of GSC, we consider the important functions of transfer price, transportation cost-sharing ratio and exchange in the model, and analyze the roles that each factor such as risk aversion, market random and so on play in GSC coordination. The approaches and results of the numerical examples show that the Incentive Mechanism Model proposed in the study achieves nice effect in GSC coordination under certain conditions.Finally, we develop a further extension of the Incentive Mechanism Model from several different perspectives and further research are presented.