Research On The Strategies Of Quality Improvement In Supply Chains By Considering Market Structures And Risk Preferences

With the rapid development of the global economy, the production supply chain is facing more demands and challenges, rather than just the traditional profit-maximization as the goal, but also considers the long-term development of enterprises. This means that manufacturers and suppliers of a supply chain as a unit should combine with the current business environment, the enterprises’ characteristics of their own development and corporate culture to explore a strategy in favor of enterprises’survival and development.Enterprises’ quality improvement strategies with different risk preferences in their own market structure are discussed under the demand uncertainty to realize the goal of enterprise utility maximization. Demand uncertainty is influenced by both price and quality, premising consumers are rational and the larger of product quality the better type, which is positive correlation between demands and products’ price inversely, and negative between demands and quality of the product. The market structure factors are considered in this article, and the environment of enterprises is divided into two categories: market-driven pricing and enterprise-led pricing. Market-driven pricing type is divided into the perfectly competitive market and the monopolistic competition market, and the enterprise-led pricing type is divided into an oligopoly market and monopoly market. Because the products in a perfectly competitive market have no difference in quality so that quality improvements are inexistent, and in monopoly market because of its unique position there is no need for quality improvement. In this paper, monopolistic competition market of market-driven pricing and oligopolistic market of enterprise-led pricing are be discussed for getting a quality improvement strategy. Combined with enterprises’ characteristics and corporate culture, the factor of enterprises’ risk preferences is considered in this paper. The concept of the value loss function is introduced, and setting the profit function and value loss function under all kinds of risk preferences together to form a new function:utility function. The optimum quality with utility maximization as the fundamental objective is determined in order to explore the enterprises’directions for product quality improvement.After taking full account of the two factors of the market structure and risk preferences, a passing rate is introduced to think over all kinds of errors in the actual production which will leads to the emergence of defective products. Then, supply chain is divided into integrated and distributed (including manufacturer-driven and supplier-led) to research. In perfectly competitive market and monopolistic competition market, a supply chain of a segment market will be discussed in integrated and distributed (including manufacturer-driven and supplier-led) ways, and the oligopoly market which is based on the seven strategic combination (NN, Oil, the Tll, ODD, the TDD, the OID and TID)of the two competing supply chains is discussed. The utility-quality models of each case are established and worked out the best quality improvement strategies to meet the utility maximization. Finally, Mathematica5.0software is used in simulation, and corresponding conclusions of each case will be obtained by the analysis of the results.