TITLE:
The Dynamic Multi-Task Supply Chain Principal-Agent Analysis
AUTHORS:
Shanliang LI, Chunhua WANG, Daoli ZHU
KEYWORDS:
Supply Chain Management, Multi-task Principal-agent, Dynamic Incentive, Moral Hazard
JOURNAL NAME:
Journal of Service Science and Management,
Vol.2 No.4,
December
15,
2009
ABSTRACT: In the supply chain by the composition of the supplier and the retailer, the supplier offers products to the retailer for sales while the retailer affects the sales outcome by his effort which is divided into two dimensions. One is for the short-term sales task and the other is for the long-term sales task. For the long-term development of the enterprise, the supplier wants to inspire the retailer to make more effort for the long-term task. However, due to the asymmetric information, the supplier can’t observe the retailer’s action and the moral hazard will come into being. To deal with this problem, we construct the dynamic multi-task supply chain principal-agent model, by which we analyze the impact of the information asymmetry to the supply chain contract. Furthermore, by comparing the contracts between the single-term multi-task and two-term multi-task, we have analyzed their different effect on the commission rate.