DefinePK

Abstract

To achieve the maximized benefit in service supply chains, an effective incentive to influence service provider146s behavior is indispensable. This incentive could be implemented via the payment to suppliers. In this study, the optimal incentive payment solution for service suppliers in service supply chains is considered and the impacts of relevant parameters analyzed. The study of incentive payment includes optimal incentive payment function, the precondition of incentive, profit allocation control, etc. The results show that an effective incentive payment will bring additional benefits for the whole supply chain. And the higher the cost of the service provider146s high effort is the less effective the incentive payment solution is. Also the bigger the sensitivity of market demand to service provider146s effort level is the further the originator need to implement such incentive solution.