Management Review ›› 2021, Vol. 33 ›› Issue (9): 294-303.

• Logistics and Supply Chain Management • Previous Articles     Next Articles

The Pricing Model of Emergency Supplies Purchasing Based on Production Capacity Reserve

Hu Zhongquan1, Tian Jun2, Feng Gengzhong2   

  1. 1. School of Economics and Management, Xidian University, Xi'an 710126;
    2. School of Management, Xi'an Jiaotong University, Xi'an 710049
  • Received:2018-07-09 Online:2021-09-28 Published:2021-10-09

Abstract: In order to better promote the cooperation with the contractual enterprises in the production capacity reserve of emergency supplies, governments need to reasonably price the supplies provided by enterprises. Based on this, from the perspective of market mechanism, this paper establishes a pricing model of emergency supplies procurement based on the capacity reserve of contractual enterprises by using a quantity flexible contract. After deducing the optimal reserve decision of the enterprise and the optimal purchasing price of the government, the paper finds that the quantity of government's own reserve and the probability of disasters have a significant impact on the decision-making of both the government and the enterprise. The impact of these two factors on the government' cost and enterprise's profit is further analyzed. The results show that when the decision-making of both the government and the enterprise reaches equilibrium state, (1) the optimal purchasing price of the government decreases with the increase of the probability of disasters, but at this time, the contractual enterprise would increase the reserve, instead of reducing it, resulting in a increase in profit; (2) excessive quantity of government reserve does not only hinder the willingness of the enterprise to cooperate, but also increases the purchasing price and the government's cost. Finally, the validity of the conclusions is verified by numerical simulation.

Key words: emergency supplies purchasing, emergency supplies reserve, production capacity reserve, quantity flexible contract, pricing game