Research on Service Effort Coordination of E-tailer Supply Chain Based on Differential Game

In a supply chain consisting of an e-tailer and a third-party logistics (TPL) supplier, both logistics service effort and the level of brand goodwill can affect the demand of commodity. This paper studies the coordination of supply chain in the context of logistics service effort. Using differential game theory, the optimal results of logistics service effort and brand goodwill are obtained both in centralized and decentralized decision-making scenarios, and the market demand and total profit of the supply chain system are compared through numerical experiments. The results show that the logistics service effort, market demand and total profit of the supply chain are the largest under the centralized decision-making scenario. It can be seen that the centralized decision-making can achieve the largest efficiency of the supply chain system. The contract provided by the e-tailer can incentives the TPL to work hard, but the total profit of the supply chain is reduced under the decentralized decision-making scenario. This paper can provide a theoretical basis for the scientific decision-making of supply chain members in service level improvement behavior, incentive mechanism design, and choice of game structure.