Coordination mechanism in service supply chains with wholesale price contracts

With the emergence of integrated service provider operational modes such as the fourth party logistics (4PL), package financial service experts etc., the operational optimization of service supply chains has attracted great attention. Based on wholesale price contract, this paper constructed a pure service two-echelon structure and analyzed the service supply chain's incentive mechanism and coordination mechanism. The paper argues that in order to optimize the benefits of service supply chains, it calls for the service provider to implement incentive mechanism on service supplier, and the incentive mechanism directly affects the coordination condition in service supply chain as well as the flexibility of profit distribution. The results show that service supply chains based on wholesale price contract can realize coordination; And different from the product supply chain, the service supply chain coordination is subject to related parameters from the certain service supply chains such as suppliers' effort cost, demand distribution under different efforts, etc.