Cost Management Based On Principal-Agent Theory In Supply Chain

Gobal competition, diverse and individualized market demands and uncertain market environment have drived the emergence of supply chain management, supply chain model has replaced the single enterprise model in the market competition. The strategies of competition will consider the issue of cost management, consequently, the cost management in the supply chain will be the new break when seeking the competitive strength. Cost management in supply chain is the inter-organizational cost management, pursuing the entire cost reducing in supply chain, it will set stricter require for management.In supply chain, each enterprise is an independent economic entity, there are universal interest conflicts and information asymmetries between them, the principal-agent problems are pervasive, tansaction costs are high, the cooperation relationship is weak when managing the costs, these issues will affect the effect of cost management in supply chain. Cost management will analyze and control the whole costs in supply chain, however the emphasis has been put on the inner costs now, and the existing methods are not all suit for the cost management in supply chain; So how to accelerate the cooperation and design the suitful cost method are the contents of research on supply chain management and cost management. This dissertation tries to construct the framework of cost management based on the principal-agent theory in supply chain, in order to make a further study and discussion about cost mangement in supply chain.This dissertation constructs the framework of cost management based the principal-agent theory, analyzes the principal-agent relationships and problems in supply chain, and explains how to solve these problems, analyzes the limitations of the existing methods of cost management and probility of their intergration, designs the activity-based target cost in supply chain, and explains its process in the cost mangement. With the analysis, we find that cost management based on the principal-agent theory in supply chain will desigh the organization and method of cost mangement. Organization design, that is trust between supply chain enterprise, will solve the the principal-agent problem effectively and reduce the cost in supply chain; the activity-based target method is suit for the cost management in supply chain.The innovations of this dissertation are that basing on the principal-agent theory, we expain the transaction costs in detail; According to the framework of cost calculation in supply chain, we analyze the relations between the direct costs,activity-based costs and transaction costs, in order to look for reducing the entire costs in supply chain; we construct the framework of cost management based the principal-agent theory, design the activity-based target method, explain its process in the cost management.