Contract Coordination Mechanism Between Online Store and TPL Under Iogistics Service Quality Constraint

Abstract:

As for the supply demand relationship between online store and the third party logistics(TPL), the concept of the distribution perfectness ratio was introduced to reflect the service quality of TPL. A non cooperative game model and a cooperative game model were constructed respectively upon the assumption that the market demand function depended on the product price and perfectness ratio of distribution. A comparative study of the two decision models revealed the deficiency of traditional contract and the feasibility of the redesigned contract in supply chain coordination. Computation example analysis results show that the logistics service quality contributes to the total revenue of the supply chain. Pareto optimality can be realized by selecting proper benefit allocation coefficients, whose range are recommended correspondingly. Additionally, coordination contract proves to be effective in reducing TPL’s service prices and the online stores’ product prices.

Key words:the third party logistics (TPL); online store; service quality; revenue sharing; coordination contract