Channel coordination in logistics service supply chain under service integrator's fairness concerns

Abstract

Logistics service supply chain (LSSC) is a new type of service supply chain, and research on channel coordination of LSSC has increasingly caught the attention in supply chain studies. Given the influence of fairness concern behavior, it is necessary to incorporate fairness concern into LSSC to discuss its effect on channel coordination. This paper examines the wholesale price contract under a two-echelon LSSC setting with stochastic demand from the perspective of LSI's fairness concerns. Two fairness models are established, that is, disadvantageous inequality aversion model and advantageous inequality aversion model. Moreover, a benchmark model is constructed without fairness concerns included. By deriving models and analyzing numerical experiments, several assumptions are justified. The contribution of this paper lies in twofold: first, a relative advantage status coefficient is introduced; second, a coordination scenario under a wholesale price contract is reached under a certain condition.