Research On Safety Investment Cooperation In Supply Chain Considering Corporate Society Responsibility

Under the market economy, some small and medium-sized manufacturing enterprises ignore the importance of safe production; even invest nothing into the production safety, which cause a lot of disastrous accidents. These accidents hurt not only society and enterprises but also related enterprises seriously. Some cases show that the more the companies care about his corporate social responsibility (CSR), the more willing they will make safety investment. The research purpose is to find the solution of the manufacture’s cooperation with his supplier, stimulating her to make safety investment, ensuring his profit at the same time.Manufacture’s and supplier’s net profit was the objective function, considering the CSR’s undertaking could reduce the expected risk cost, increase the customers’ demand but bring more capital occupation cost. The paper studied the manufacture and supplier’s safety investment in non-cooperative situation first, which could be the comparison of the cooperative. In cooperative situation, two contracts —ost-sharing and the revenue-sharing were studied. And under both contracts, the manufacture took two objectives:supplier’s safety investment level in the centralized supply chain as the stimulant objective and the optimal profit as the optimal objective. After the decision-making process, the paper made sensitivity analysis of related parameters, especially customer’s CSR sensitive coefficient.Matlab was used to make numerical simulation to compare the manufacture and the supplier’s profit in independent and contract-cooperative situation, and under the two contracts. It was proved that the cooperation was feasible. In addition, the revenue-sharing contract wad proved to be more effective. Sensitivity analysis told that the more the manufacture care about the customer’s CSR coefficient, the less bargaining power he will have and the more willing he will undertake the cost and share the revenue. The supplier would utilize her capital occupation cost parameter to win more compensation in the negotiation.The research has its reference value on safety investment cooperation in the supply chain.