Logistics Service Supply Chain Coordination Based On Quality Guarantee

Service quality guarantee is an important signal of quality, which helps reducecustomers’perceived risk and ensure a smoothdeliveryof service, and therebyservicequality guarantee is regarded as one of the most effective strategies to attractcustomers. Unfortunately, current researches related to service guarantee seem tomerely show solicitude for the individuals that make guarantees, and overlook tosome extend the interaction between upstream and down streams enterprises.Particularly, theoretical achievements of service quality guarantee are mainly fromindustries investigation and lack quantity exploration. Consequently, this paper willinvestigate the coordination problems with a quality defect rate guaranteed in alogistics service supply chain (LSSC). Some theoretical suggestion are provided forthe issues on service quality guarantee.First of all, this paper demonstrates the origin and significance of the topic withpractical and theoretical concerns, claiming that researches abo ut service qualityguarantee in a LSSC are of great importance but lacking theoretical supports.Furthermore, according to the literature review, it’s emphasized that revisiting suchissues as quality game, the number of suppliers, procurement problems wit h demandupdating and revenue sharing in the case of a quality level guaranteed is rationalityand innovation, which laying a solid foundation for the following researches.Afterwards, this paper will investigate the coordination problems in a logistics se rvicesupply chain LSSC from four aspects: quality coordination, the number of suppliers,service capacity procurement and revenue distribution. Specifically,(1) this paperinvestigates the optimal quality decision-making of the integrator and the providerunder three game models (Nash game, Stackelberg game and centralized decision),and a sensitivity analysis is conducted to explore the relationship between the optimalstrategies and the elasticity of the customer demand to the quality defectguarantee/customer punishment;(2) this paper proposes a model for the optimalnumber of the suppliers with a constraint of fairness preference. The influencemechanism of the parameters on the optimal number of suppliers are analyzed;(3) in viewof a stochastic service market, this paper obtains the quality guarantee defect rate andthe quantity of procured capacity before and after demand update, A comparison of the decisions under four situations is conducted to seek for tactical and managerial insights for firms;(4) this paper also claims that there exist limitations when a general revenue-sharing contracts coordinate a LSCC in the case of updating demand information, and thereby redesign the revenue-sharing contract to achieve a better performance of the LSSC. Finally, the main conclusion and future research prospect are given.