Abstract:In recent years, logistics companies of different sizes has been considerably developed all over the country, with the intensified competitions. To stand out in the competitive market, a logistics company must improve its logistics situation, focus on the function of distribution center, reduce logistics costs for enhancing the impact of supply chain, and rapidly response to customer needs. Thus, how to better design or optimize the existing distribution route for reducing logistics costs becomes a difficult problem, and this article will do some researches on it.

The purpose of this paper is to investigate the supplier development (SD) in construction industry. As the supplier's production capacity cannot meet the construction requirements, the owner wants to take incentives to encourage the supplier to improve its production capacity. A principalagent model and a Stackelberg game model are proposed to study the impact of owner's incentives including cost sharing and purchase price incentive on the production capacity improvement in SD. Furthermore, we give a sensitivity analysis of the influence of supplier's internal and external parameters, i.e., purchase quantity, cost structure, market price and market demand, etc., on the production capacity improvement. The findings of this study can help the owner to make a better decision on the incentive mechanisms for SD, resulting in both better SD practices and a win-win situation.