Analysis of quality game behavior for cold-chain logistics outsourcing

Abstract

Whether there is an optimal cooperation pattern of quality investment strategy between the third party logistics provider and its subcontractor in cold-chain logistics industry was discussed. Based on game theory, Nash Equilibrium, Stackelberg Equilibrium, and the cooperative equilibrium pattern with the quality policies and credibility factors of both sides were analyzed. The provider and subcontractor would reach state of equilibrium in quality investment strategies when the provider subcontracted the logistics business or part of the business to the subcontractor. The results show that they will not be likely to choose the state of equilibrium maximizing total benefits of both sides, due to the chasing of their own interests. These mathematical models provide an important foundation for monitoring and optimizing the quality investment strategy of the provider and subcontractor in cold-chain logistics outsourcing.