Title: Service capacity procurement in logistics service supply chain with demand updating and reciprocal behaviour

Authors: Weihua Liu; Wanying Wei; Donglei Zhu

Addresses: College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China

Abstract: This paper builds a logistics service supply chain consisting of a logistics service integrator (LSI) and a functional logistics service provider (FLSP), where they collaborate with a reciprocity contract. We aim to analyse the impact of reciprocity on the supply chain members' two-stage service capability procurement decisions under demand updating through a multi-method, combining game theory and a case study. We find that a reciprocity contract could provide a win-win situation and coordinate the supply chain when reciprocity factors are in an appropriate range. Moreover, the reciprocal behaviour of LSI can promote the reduction of wholesale prices, and the reciprocal behaviour of FLSP will increase the purchasing quantity as well as bring forward the purchasing time point of LSI. Lastly, the reciprocal behaviour of both parties is mutually reinforcing; that is, when one party increases its own reciprocity factor, the other party also increases its reciprocity factor as a return. [Received: 30 September 2018; Accepted: 11 February 2020]

Keywords: service capacity procurement; reciprocity contract; demand updating; case study.

DOI: 10.1504/EJIE.2021.113510

European Journal of Industrial Engineering, 2021 Vol.15 No.1, pp.35 - 66

Accepted: 11 Feb 2020
Published online: 03 Feb 2021 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article