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Profit Allocation Mechanism of Supply Chain with Bilateral Asymmetric Costs Information

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Proceedings of the Eighth International Conference on Management Science and Engineering Management

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 280))

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Abstract

This paper investigates the problem of profit allocation under bilateral asymmetric information environment. More specifically, we consider a supply chain consisting of one risk-neural manufacturer and one risk-neural retailer for an innovation product. In order to facilitate the cooperation, the manufacturer and the retailer commit to share their private information under a commitment contract based on the AGV (d’Aspremont and Gerard-Varet) mechanism. We analyze the relationship between the expected information rents and the realized supply chain profit, and discuss the allocation rule implementation under three different cases by introducing the R-S-K negotiation. We show that the commitment contract can achieve truthful information revealing and allocate the ex post profit reasonably. Finally, one numerical example is presented to explain the main results.

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Acknowledgments

This work was supported by the Foundation of National Nature Science of China (Grant NO. 71071103) and the Ministry of Education, Humanities and Social Science Planning Fund for the Western and Frontier (NO. 13XJC630014), and the Dr. Innovation Research for the Central University (NO. 13NZYBS08).

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Authors and Affiliations

  1. School of Computer Science and Technology, Southwest University for Nationalities, Chengdu, 610041, People’s Republic of China

    Xinhui Wang

  2. Business School, Sichuan University, Chengdu, 610064, People’s Republic of China

    Hongmei Guo & Xianyu Wang

  3. School of Tourism and Historical Culture, Southwest University for Nationalities, Chengdu, 610041, People’s Republic of China

    Jie Zhong

Authors
  1. Xinhui Wang
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  2. Hongmei Guo
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  3. Xianyu Wang
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  4. Jie Zhong
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Corresponding author

Correspondence to Xinhui Wang .

Editor information

Editors and Affiliations

  1. Business School, Sichuan University, Chengdu, China

    Jiuping Xu

  2. Depart de Enge Mecânica e Industrial, Faculdade de Ciências e Tecnologia - Universidade Nova de Lisboa (FCT/UNL), Caparica, Portugal

    Virgílio António Cruz-Machado

  3. LeBow College of Business Department of Decision Sciences, Drexel University, Philadelphia, Pennsylvania, USA

    Benjamin Lev

  4. Institute of Operations Research, Karlsruhe Institute ofTechnology (KIT), Karlsruhe, Germany

    Stefan Nickel

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Wang, X., Guo, H., Wang, X., Zhong, J. (2014). Profit Allocation Mechanism of Supply Chain with Bilateral Asymmetric Costs Information. In: Xu, J., Cruz-Machado, V., Lev, B., Nickel, S. (eds) Proceedings of the Eighth International Conference on Management Science and Engineering Management. Advances in Intelligent Systems and Computing, vol 280. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-55182-6_55

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  • DOI: https://doi.org/10.1007/978-3-642-55182-6_55

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-55181-9

  • Online ISBN: 978-3-642-55182-6

  • eBook Packages: EngineeringEngineering (R0)

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