Research On Manufacturer's Optimal Capacity Construction Under Asymmetric Information

For all enterprises, production capacity is a very important issue, which plays a vital role in the development of the business. In this increasingly competitive market, the life cycle of new products is being shorter and shorter, which would make the enterprises produce several generations of products with different quantities and technology. In that case, the production capacity design is very important in the enterprise management. Generally, before the manufactures in the supply chain receive orders, they have to get necessary demand forecast information from the retailers in order to determine their own production capacity. However, the information in the supply chain is changing constantly and the members in the supply chain all desire the maximized profit, which would make the members conceal or distort their private valued information to reap great benefits. That would undoubtedly undermine the efficiency of the supply chain collaboration, even lead to the failure of the supply chain collaboration. This paper summed up the research results of supply chain contract and in the manufacture's view, innovatively analyses the supply chain coordination model with wholesale price contract and buy-back contract under asymmetric information. The contents of this paper are as below:(1) Based on the theory and literature of supply chain coordination, this paper introduces some scholars' research on how to construct supply chain contract and to get supply chain coordination. Meanwhile this paper cites in the model of wholesale price contract, buy-back contract, revenue sharing contract and quantity flexibility contract.(2) This paper constructs the supply chain coordination model with wholesale price contract separately under conditions of centralized decision-making and decentralized decision-making. On the other hand, this paper comparative analyses the manufactures' optimal production capacity and the overall profit of the supply chain with centralized decision-making separately under symmetric information and asymmetric information. It is concluded by the model and numerical simulation that with wholesale price contract the contract parameters couldn't help achieve the global supply chain coordination under both symmetric information and asymmetric information. (3) This paper cites in a mixed contract of buy back contract and wholesale price contract to the supply chain collaboration process under symmetric information and asymmetric information separately. Meanwhile this paper analysis the supply chain system and its numbers'decision-making behavior and design the appropriate contract parameters to encourage the numbers taking a part in the supply chain collaboration. The numerical result and sensitivity analysis of amplification factor show that under symmetric information, by setting a reasonable contract parameter we can achieve the coordination of the supply chain and reach Pareto optimization. On the other hand, under asymmetric information, no matter how the retailers distort the demand forecast information, the manufacturers could always achieve the coordination of the supply chain by designing corresponding contract parameters of the pre-designed contract model.