797

1
Decision Decision Decision
Decision
of of of
of
the the the
the
competitive competitive competitive
competitive
and and and
and
cooperative cooperative cooperative
cooperative
rrr
r
eee
e
lationships lationships lationships
lationships
between between between
between
supplier supplier supplier
supplier
and and and
and
purchaser purchaser purchaser
purchaser
Based Based Based
Based
on on on
on
maximal maximal maximal
maximal
profits profits profits
profits
Zhenggang Zhenggang Zhenggang
Zhenggang
He He He
He
111
1
Zhengqiang Zhengqiang Zhengqiang
Zhengqiang
He He He
He
222
2
Na Na Na
Na
Li Li Li
Li
111
1
Wei Wei Wei
Wei
Liao Liao Liao
Liao
333
3
1
College oI Logistics. Southwest Jiaotong University. Chengdu 610031. P.R. China
2
Hunan Finance and Accounting Research BaseChangsha. 410079. P.R. China
3
Department oI E-commercial AIIairs. Chengdu University oI InIormation Technology.
Chengdu 610225. P.R. China
Abstract: Abstract: Abstract:
Abstract:
In order to maximize proIits. the enterprises oI the supply chain can choose
two kinds oI basic strategy i.e. competition and cooperation. The two kinds oI strategy
generally lie in the Iactors that aIIect the maximal proIits oI the chain. Based on the
maximal proIits oI enterprises. we will establish a mathematical model and discuss the
changes oI the inIluential Iactors (especially sales price oI the supplier) to help the
supplier and the purchaser choose an optimal strategy.
Keywords: Keywords: Keywords:
Keywords:
CCC
C
ompetition-cooperation relationshipSupplier and purchaserRelated Total
ProIit
1. 1. 1.
1.
Introduction Introduction Introduction
Introduction
The relationship among enterprises consists oI two kinds oI basic relationship:
competition (non- cooperation) and cooperation. Competition is the characteristic oI a
market economy. Competition will make the best oI resources with eIIiciency and
development. But in this competitive market. enterprises may beneIit equally or even
more through cooperation than through competition
|1|
. The key to managing the supply
chain is dealing well with the competitive and cooperative relationships among
enterprises.
The relationships among supply chain enterprises are generally the relationship
between supplier and purchaser. whose competitive and cooperative relationships
become a miniature example among those enterprise relationships. and a research Iocus.
A lot oI research in this Iield has made qualitative and quantitative analysis oI this topic.
Qualitative analysis such as Sven A. Haugland`s discussion as to whether both parties
must Iollow a cooperative strategy and establish a long-term relation in competitive
market
|2|
. Laura carried out a large-scale investigation and Iound that competition is
more eIIicient than cooperation
|3|
. Z. Lu analyzed the present conditions and Iurther
trends oI relationships among enterprises and claimed that it will experience Iour stages.
Irom the traditional transaction to a strategic cooperation relationship
|4|
. J. Yao deemed
that the traditional supply chain relationship based on rights is a competitive relation
which is merely to win or lose. and a strategic cooperation relationship based on trust is
a typical win-win relationship
|5|
. The development oI an enterprise relationship was
divided into three stages by Z.X. Chen. Irom the historical angle. Irom the traditional
enterprise relation. and Irom logistics to a strategy relationship
|6|
. Y.L. Sun holds that
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Logistics 798
2
the new strategy alliance requests that the enterprises adiust the view oI value. and
establish a competitive and cooperative relationship among enterprises to win
sustainable advantages
|7|
. Y. Zhang carried out research on it with the theory oI
transaction cost. In her opinion. enterprise relationships are directly aIIected by the
Iactor oI commitment. dependence and proIessional investment etc. and this Iorms
diIIerent kinds oI relationships which will decide success or Iailure
|8|
. Quantitative
analysis is as Iollows: M. M. Zhong analyzed the limited and unlimited transaction oI
enterprises in the upper and lower levels on the supply chain. and compared the supply
chain beneIits with these two strategies which are Iull cooperation and inadequate
cooperation
|9|
. D. M. Song established a model oI enterprises` cooperation and
competition. and adopted 'replication in biology to emulate and participate in human`
study and adiustment .The evolved stable strategy was used to describe a long period oI
evolution oI enterprises` cooperation and competition
|10|
. W.B. Yao made use oI the
Game Theory to analyze the relationship oI the upper and lower supply chain in a
completely Iree competitive market. completely monopolized market and a monopolized
competitive market. He opines that enterprises compete more under the completely Iree
competitive market and completely monopolized market. but enterprises cooperate more
under a monopolized competitive market
|11|
.Susan X. Li analyzed the selling price oI the
seller and an economic ordering quantity oI the purchaser under the circumstances oI
cooperation and non-cooperation
|12|
.
The competitive and cooperative relationships between supplier and purchaser
aren`t static. because the choice oI the cooperative or competitive strategy Ior supplier
and purchaser can change within diIIerent situations. This is due to the inIluential Iactors
oI the correlative proIits which can vary with circumstance. to a certain extent. which
decides the choice oI cooperative and competitive strategy between supplier and
purchaser. Among those inIluential Iactors .the sales price oI the supplier plays an
important role in deciding the relationships. How the sales price oI the supplier under
diIIerent instances aIIects the correlative total proIits oI the system is analyzed to help
supplier and purchaser decide upon a cooperative and competitive relationship .
2. 2. 2.
2.
Model Model Model
Model
Assumptions Assumptions Assumptions
Assumptions
We suppose that a manuIacturer (the supplier) supplies some products to a dealer
(the purchaser); the product will never be out oI stock; the yearly need oI the purchaser
is D. the sales price oI the supplier to the dealer is . the sales price oI the dealer to the
V
3
downstream customer is . and . According to the property between and .
E
3
V E
3 3 t
E
3 '
supposing .The supplier owns all the inIormation oI the
L
E L
3 '
E
D

0 ! D 1 0 d d E
dealer`s correlative parameter and decides the sales price based on the dealer`s sales
price. Supposed is constantand .The maximal investment oI the
V
3
E
N3
N 1 0 d N
purchaser is . the preparation cost oI the supplier is .the unit storage cost oI the
0
&
V
2
product Ior the supplier is . the ordering cost oI the dealer is .and the unit storage
V
+
E
2
cost Ior the dealer is . Supposing is the percentage oI product price. then
E
+
V
K
E
K
Copyright ASCE 2008 The Eighth International Conference of Chinese Logistics and Transportation Professionals
Downloaded 04 May 2011 to 124.3.242.10. Redistribution subject to ASCE license or copyright. Visit http://www.ascelibrary.org
Logistics 799
2
the new strategy alliance requests that the enterprises adiust the view oI value. and
establish a competitive and cooperative relationship among enterprises to win
sustainable advantages
|7|
. Y. Zhang carried out research on it with the theory oI
transaction cost. In her opinion. enterprise relationships are directly aIIected by the
Iactor oI commitment. dependence and proIessional investment etc. and this Iorms
diIIerent kinds oI relationships which will decide success or Iailure
|8|
. Quantitative
analysis is as Iollows: M. M. Zhong analyzed the limited and unlimited transaction oI
enterprises in the upper and lower levels on the supply chain. and compared the supply
chain beneIits with these two strategies which are Iull cooperation and inadequate
cooperation
|9|
. D. M. Song established a model oI enterprises` cooperation and
competition. and adopted 'replication in biology to emulate and participate in human`
study and adiustment .The evolved stable strategy was used to describe a long period oI
evolution oI enterprises` cooperation and competition
|10|
. W.B. Yao made use oI the
Game Theory to analyze the relationship oI the upper and lower supply chain in a
completely Iree competitive market. completely monopolized market and a monopolized
competitive market. He opines that enterprises compete more under the completely Iree
competitive market and completely monopolized market. but enterprises cooperate more
under a monopolized competitive market
|11|
.Susan X. Li analyzed the selling price oI the
seller and an economic ordering quantity oI the purchaser under the circumstances oI
cooperation and non-cooperation
|12|
.
The competitive and cooperative relationships between supplier and purchaser
aren`t static. because the choice oI the cooperative or competitive strategy Ior supplier
and purchaser can change within diIIerent situations. This is due to the inIluential Iactors
oI the correlative proIits which can vary with circumstance. to a certain extent. which
decides the choice oI cooperative and competitive strategy between supplier and
purchaser. Among those inIluential Iactors .the sales price oI the supplier plays an
important role in deciding the relationships. How the sales price oI the supplier under
diIIerent instances aIIects the correlative total proIits oI the system is analyzed to help
supplier and purchaser decide upon a cooperative and competitive relationship .
2. 2. 2.
2.
Model Model Model
Model
Assumptions Assumptions Assumptions
Assumptions
We suppose that a manuIacturer (the supplier) supplies some products to a dealer
(the purchaser); the product will never be out oI stock; the yearly need oI the purchaser
is D. the sales price oI the supplier to the dealer is . the sales price oI the dealer to the
V
3
downstream customer is . and . According to the property between and .
E
3
V E
3 3 t
E
3 '
supposing .The supplier owns all the inIormation oI the
L
E L
3 '
E
D

0 ! D 1 0 d d E
dealer`s correlative parameter and decides the sales price based on the dealer`s sales
price. Supposed is constantand .The maximal investment oI the
V
3
E
N3
N 1 0 d N
purchaser is . the preparation cost oI the supplier is .the unit storage cost oI the
0
&
V
2
product Ior the supplier is . the ordering cost oI the dealer is .and the unit storage
V
+
E
2
cost Ior the dealer is . Supposing is the percentage oI product price. then
E
+
V
K
E
K
3
represents the unit storage cost oI the supplier and dealer
V E V
+ 3 K =
E E E
+ 3 K =
respectively. The related total proIits oI the supplier is . and the related total proIits oI
V
*
the dealer is .
E
*
3. 3. 3.
3.
Model Model Model
Model
Establishment Establishment Establishment
Establishment
3.1 3.1 3.1
3.1
Non-cooperation Non-cooperation Non-cooperation
Non-cooperation
between between between
between
the the the
the
manufacturer manufacturer manufacturer
manufacturer
and and and
and
the the the
the
dealer dealer dealer
dealer
On the condition oI non-cooperation between the supplier and the dealer. the dealer
generally decides his purchasing ordering amount based on his maximal proIits. so the
supplier has to accept the dealer`s order to meet the buyer`s needs.
The related total proIits oI the dealer are:
( )
E E E V E E
3 K
4
2
4
'
' 3 3 *
2
=
The economic ordering quantity oI the dealer is:
E
E
D D
+

= = =
1
*
2 2 2
E E
E
E E
E E
E E
E
3 K
2
3 K
2 3
3 K
'2
4
The related total proIits oI the ordering dealer based on an economic ordering
quantity are:

( )
E E E V E E
3 K '2 ' 3 3 * 2 = ( )
E E E E
K 2 3 3 N
E E
D D


1 1
2 1
The maximum oI is discussed below to maximize
( ) ( )
E E E E E E
K 2 3 3 N 3 *
E E
D D

=
1 1
2 1
the related total proIits oI the dealer:
Set
( ) ( ) ( )
E E E E
3 < 3 ; 3 * =
II
( ) ( ) ( )
E E E E
3 < 3 ; 3 * =
Then:
( ) ( )
E
D

=
1
1
E E
3 N 3 ; ( )
E E E E
K 2 3 3 <
E
D

=
1
2
According to the idiosyncrasy oI the Iunction . we can draw its Iigure
( )
E E
3 *
outline shown in graph 1:
Graph1 Graph1 Graph1
Graph1
sketch sketch sketch
sketch
map map map
map
( )
E E
3 *
Only when . that is and
( ) ( )
E E
3 < 3 ; >
( )
E
D

|
|
.
|

\
|

= >
1
1
2
0
1
1
2
N
K 2
3 3
E E
E E
( ) 0 >
E E
3 *
. can increase with the increasing . Hence. the dealer tries to
( )
E
D

|
|
.
|

\
|

>
1
1
2
1
2
N
K 2
3
E E
E
( )
E E
3 *
E
3
( ) ( )
E
D

=
1
1
E E
3 N 3 ;
( )
E E E E
K 2 3 3 <
E
D

=
1
2
( )
E E
3 *
( )
E
D

|
|
.
|

\
|

1
1
2
1
2
N
K 2
E E
E
3
Copyright ASCE 2008 The Eighth International Conference of Chinese Logistics and Transportation Professionals
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Logistics 800
4
Iind the maximum oI under the limiting condition.
E
3
The related total costs oI the dealer are:
E E E V E
3 K '2 ' 3 & 2 + =
There is a restricted condition. the biggest investment oI the dealer is
( ).So .
0
&
0
& &
E
s
E E E V E
3 K '2 ' 3 & 2 + = +
E
D
1
E
3 N
E E E
K 2 3
E
D
1
2
s
0
&
We can get:
E
3
( )
E
D

|
|
.
|

\
|
+ +
s
1
1
2
0 0
2
N
N& K 2 K 2 N& K 2
E E E E E E
Under this condition. the maximum oI is :
E
3
( )
E
D

|
|
.
|

\
|
+ +
=
1
1
2
0 0 *
1
2
N
N& K 2 K 2 N& K 2
3
E E E E E E
E
1-1
II we compare with
( )
E
D

|
|
.
|

\
|
+ +
=
1
1
2
0 0 *
1
2
N
N& K 2 K 2 N& K 2
3
E E E E E E
E
( )
E
D

|
|
.
|

\
|

=
1
1
2
0
1
1
2
N
K 2
3
E E
E
II . and . .so there is a .we can get . 0 N
0
1
*
1 E E
3 3 > 1 N
0
1
*
1 E E
3 3 <
*
2
N N =
0
1
*
1 E E
3 3 =
When . we can get . At this time the dealer can`t get any proIits (
*
2
N N >
0
1
*
1 E E
3 3 < N
is too big to make his sales revenue support his purchasing costs and stock costs) and
can purchase nothing Irom the supplier. Only when . can the dealer purchase the
*
2
N N <
products Irom the supplier Ior the purpose oI getting proIits.
Thus. the maximal related total proIits oI the dealer are:
=
E
0D[* ( )
E E E E
K 2 3 3 N
) 1 ( ) 1 (
*
1
*
1
2 1
E E
D D


The economic ordering quantity oI the dealer is :
) 1 (
*
1
*
2
E
D
+
=
E E
E
3 K
2
4
The related total proIits oI the supplier is

V V V V
+
4
2
4
'
' 3 *
2
*
*
=
|
|
.
|

\
|
+

E
V
E
V
E E E E
K
K
2
2
K 2 3 3 N
2 2
2
) 1 ( ) 1 (
*
1
*
1
E E
D D
Being the same. because there is a to get . when . the supplier
*
1
N N = 0 =
V
*
*
1
N N <
can`t get any proIits (his sales revenue can`t sustain his stock costs) and doesn`t sell any
products to the dealer. Only when . can the supplier sell the products to the dealer
*
1
N N >
Ior the purpose oI gaining proIits .
Hence. the maximal related total proIits oI the supplier-dealer system are:
=
1 W
0D[*
|
|
.
|

\
|
+ + = +

E
V
E
V
E E E E V E
K
K
2
2
K 2 3 3 * *
2 2
1 2
) 1 ( ) 1 (
*
1
*
1
E E
D D
1-2
3.2 3.2 3.2
3.2
Cooperation Cooperation Cooperation
Cooperation
between between between
between
the the the
the
supplier supplier supplier
supplier
and and and
and
the the the
the
dealer dealer dealer
dealer
Copyright ASCE 2008 The Eighth International Conference of Chinese Logistics and Transportation Professionals
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Logistics 801
4
Iind the maximum oI under the limiting condition.
E
3
The related total costs oI the dealer are:
E E E V E
3 K '2 ' 3 & 2 + =
There is a restricted condition. the biggest investment oI the dealer is
( ).So .
0
&
0
& &
E
s
E E E V E
3 K '2 ' 3 & 2 + = +
E
D
1
E
3 N
E E E
K 2 3
E
D
1
2
s
0
&
We can get:
E
3
( )
E
D

|
|
.
|

\
|
+ +
s
1
1
2
0 0
2
N
N& K 2 K 2 N& K 2
E E E E E E
Under this condition. the maximum oI is :
E
3
( )
E
D

|
|
.
|

\
|
+ +
=
1
1
2
0 0 *
1
2
N
N& K 2 K 2 N& K 2
3
E E E E E E
E
1-1
II we compare with
( )
E
D

|
|
.
|

\
|
+ +
=
1
1
2
0 0 *
1
2
N
N& K 2 K 2 N& K 2
3
E E E E E E
E
( )
E
D

|
|
.
|

\
|

=
1
1
2
0
1
1
2
N
K 2
3
E E
E
II . and . .so there is a .we can get . 0 N
0
1
*
1 E E
3 3 > 1 N
0
1
*
1 E E
3 3 <
*
2
N N =
0
1
*
1 E E
3 3 =
When . we can get . At this time the dealer can`t get any proIits (
*
2
N N >
0
1
*
1 E E
3 3 < N
is too big to make his sales revenue support his purchasing costs and stock costs) and
can purchase nothing Irom the supplier. Only when . can the dealer purchase the
*
2
N N <
products Irom the supplier Ior the purpose oI getting proIits.
Thus. the maximal related total proIits oI the dealer are:
=
E
0D[* ( )
E E E E
K 2 3 3 N
) 1 ( ) 1 (
*
1
*
1
2 1
E E
D D


The economic ordering quantity oI the dealer is :
) 1 (
*
1
*
2
E
D
+
=
E E
E
3 K
2
4
The related total proIits oI the supplier is

V V V V
+
4
2
4
'
' 3 *
2
*
*
=
|
|
.
|

\
|
+

E
V
E
V
E E E E
K
K
2
2
K 2 3 3 N
2 2
2
) 1 ( ) 1 (
*
1
*
1
E E
D D
Being the same. because there is a to get . when . the supplier
*
1
N N = 0 =
V
*
*
1
N N <
can`t get any proIits (his sales revenue can`t sustain his stock costs) and doesn`t sell any
products to the dealer. Only when . can the supplier sell the products to the dealer
*
1
N N >
Ior the purpose oI gaining proIits .
Hence. the maximal related total proIits oI the supplier-dealer system are:
=
1 W
0D[*
|
|
.
|

\
|
+ + = +

E
V
E
V
E E E E V E
K
K
2
2
K 2 3 3 * *
2 2
1 2
) 1 ( ) 1 (
*
1
*
1
E E
D D
1-2
3.2 3.2 3.2
3.2
Cooperation Cooperation Cooperation
Cooperation
between between between
between
the the the
the
supplier supplier supplier
supplier
and and and
and
the the the
the
dealer dealer dealer
dealer
5
On the condition oI cooperation between the supplier and the dealer. the supplier
and the dealer`s relationship is based on the perspective oI the biggest related proIits in
the whole supplier/dealer system. which will decide the economic ordering quantity to
optimize the system.
The related total proIits oI the supplier/dealer system are:
-
=
W
* ' 3
E ( ) ( )
E V E E V E
3 K 3 K
4
2 2
4
'
+ +
2
The economic ordering quantity and related total proIits oI the system is as Iollows:

( )
( )
E V E
V E
3 K K
2 2 '
4
+
+
=
2
*
( )
( )
E
D
+
+
+
1
2
E V E
V E
3 K K
2 2
1-3
-
=
W
* ' 3
E
( )( )
E V E V E
3 K K 2 2 ' + + 2

( )( )
V E V E E E
K K 2 2 3 3 + +
E E
D D
1 1
2
The related total costs oI the dealer are:
E E E V E
3 K
4
2
4
'
' 3 &
2
+ + =
1-4
get1-3into 1-4.we can get:
( )
( )
( )
( )
E E
E V E
V E
E
E V E
V E
V E
3 K
3 K K
2 2 '
2
3 K K
2 2 '
'
' 3 &
2
2
2
+
+
+
+
+
+ =

+
E
D
1
E
3 N
( )( )
|
|
.
|

\
|
+
+
+
+ +

V E
E
V E
E V E V E E
K K
K
2 2
2 K K 2 2 3
2
1 E
D
Being the same. iI there is a restricted condition. the biggest investment oI the
dealer ( ). the maximum oI is:
0
&
0
& &
E
s
E
3
( )
E
D
- - -

|
|
.
|

\
|
+ +
=
1
1
2
0 0 *
2
2
N
N& N&
3
E
1-5
Then:
( ) ( ) | |
( )( )
( )
( )
( )
( )
E E
V E
V E E
V E
V E E
V E V E
V E E V E E
K 2
K K
2 2 K
2 2
K K 2
K K 2 2
2 2 K K K 2
2
1
4 4 4
2 2 2
+
+
+
+
+
+
=
+ +
+ + +
= -
Being the same. iI .
0
2
*
2 E E
3 3 > 0 >
WL
*
Set then
0 =
WL
*
( )( )
E
D

|
.
|

\
| + +
=
1
1
0
2
2
V E V E
E
K K 2 2
3
II .
0 =
WL
*
( )( )
E
D

|
.
|

\
| + +
=
1
1
0
2
2
V E V E
E
K K 2 2
3
ThereIore. the maximal related total proIits oI the supplier- dealer system are:
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Logistics 802
6
=
W
0D[*
( ) ( )
( )( )
V E V E E E
K K 2 2 3 3 + +
E E
D D
1 1
*
2
*
2
2
The economic ordering quantity oI the supplier-dealer system is
( )
( )
( ) E
D
+
+
+
=
1
*
2
*
2
E E E
V E
3 K K
2 2
4
The maximal related total proIits oI the supplier-dealer system are:
=
2 W
0D[*
( ) ( )
( )( )
V E V E E E
K K 2 2 3 3 + +
E E
D D
1 1
*
2
*
2
2
1-6
3.3 3.3 3.3
3.3
The The The
The
comparison comparison comparison
comparison
of of of
of
the the the
the
total total total
total
profits profits profits
profits
and and and
and
the the the
the
decision decision decision
decision
competition-cooperation competition-cooperation competition-cooperation
competition-cooperation
relationship relationship relationship
relationship
When the supplier and the dealer compete. the maximal related total proIit is
.when the supplier and the dealer cooperate. the maximal related total proIit is
1 W
0D[*
.to compare the two conditions.we subtract 1-6Irom1-2and get:
2 W
0D[*
= A
W
0D[*
|
|
.
|

\
|
+ +

E
V
E
V
E E E E
K
K
2
2
K 2 3 3
2 2
1 2
) 1 ( ) 1 (
*
1
*
1
E E
D D
( ) ( )
( )( )
V E V E E E
K K 2 2 3 3 + + +
E E
D D
1 1
*
2
*
2
2
1-7
Get 1-1 1-5into 1-7we can get:

( ) ( )
2
0 0
2
0 0
2 2
N
N& N&
N
N& K 2 K 2 N& K 2
0D[*
E E E E E E
W
+ +

+ +
= A
- - -
( ) ( ) | | ( ) ( ) | |
N
K 2
N&
2 2 K K K 2
N
N&
2 2 K K K 2
E E
V E E V E E V E E V E E

+ + + +

+ + + +
2
1
2 4
1
2
1
2 4
1
0 0
-
Set
( ) = N n
( ) ( )
2
0 0
2
0 0
2 2
N
N& N&
N
N& K 2 K 2 N& K 2
E E E E E E
+ +

+ + - - -
( )
( ) ( ) | | ( ) ( ) | |
N
K 2
N&
2 2 K K K 2
N
N&
2 2 K K K 2
N
E E
V E E V E E V E E V E E

+ + + +

+ + + +
=
2
1
2 4
1
2
1
2 4
1
0 0
-
A
Because oI and continuum. we can get:
( ) 1 . 0 e N
( ) =

N
N
n
0
lim
( ) ( )

+ + +

2
0 0
0
2 2
N
N& K 2 K 2 N& K 2
OLP
E E E E E E
N
- - - ( )
( )

=

E E
E E
N
K 2 N
K 2 &
-
-
0
0
2
lim
Owing to . we can get
E E
K 2 > - ( ) + =

N OLP
N
n
0
( ) N OLP
N
A
0 0
lim

=
N
( ) ( ) | |
N
K 2
N& N&
2 2 K K K 2
E E
V E E V E E

+ + + + +
2 4
1
2 4
1
0 0
-
( ) ( ) | |
|
|
.
|

\
|
+ + + =
E E
V E E V E E
K 2
& &
2 2 K K K 2
2 2
0 0
-
So
( ) | | N 0D[*
W
N
A
0
lim ( ) N OLP
N
n
0
( ) N
N
A
0
lim

+
+ =
At this time. .which represents the maximal 0 > A
W
0D[*
2 1 W W
0D[* 0D[* >
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Logistics 803
7
related total proIits oI the system under the condition oI non-cooperation between the
supplier and the dealer are bigger than that under the condition oI cooperation. so the
system is superior. which is under the non-cooperation.
Being the same.
( ) =

k lim
k
n
1
( ) ( )

+ + +

2
0 0
1
2 2
k
kC h O h O kC h O
lim
b b b b b b
k
- - -
( ) ( )
0 0
2 2 C h O h O C h O
b b b b b b
+ + + = - - -
( ) k lim
k
A
1
( ) ( ) | |

+ + + + + =
b b
s b b s b b
h O
C C
O O h h h O
2 4
1
2 4
1
0 0
-
So .
( ) | | = A

k MaxG
t
k 1
lim ( ) k lim
k
n
1
( ) k
k
A
1
lim

+
0 <
At this time. . which represents the maximal related total
0 < A
t
MaxG
2 1 t t
MaxG MaxG <
proIits oI the system under the condition oI cooperation between the supplier and the
dealer. are bigger than those under the condition oI non-cooperation. thus the system is
superior under the situation oI cooperation.
There is a k. .II . .because
( ) 0 = A k MaxG
t
0
1
k k = ( ) 0
0
1
= A k MaxG
t
( ) | | 0
0
> A

k MaxG lim
t
k
. When and .the system is superior under the
( ) | | 0
1
< A

k MaxG lim
t
k
0
1
k k < ( ) 0 > A k MaxG
t
situation oI non-cooperation. when and . the system is superior under
0
1
k k > ( ) 0 < A k MaxG
t
the situation oI cooperation.
4. 4. 4.
4.
Conclusion Conclusion Conclusion
Conclusion
We can conclude`Irom the above models that ( the pricing oI the supplier )
s
P
decides the cooperation and non-cooperation relationship between the supplier and the
dealer. The pricing oI the dealer can adiust the value oI to change on the basis oI k
s
P
the selling price oI the dealer. Because the value oI also decides the
b
P
k
cooperation and non-cooperation relationship between the supplier and the dealer. there
is a critical value . when .the supplier and the dealer can choose a
0
1
k
0
1
k k < ( ) 0 > A k MaxG
t
competitive strategy to maximize the related total proIits oI the system. At the same time.
when . the supplier and the dealer can choose a cooperative strategy
0
1
k k > ( ) 0 < A k MaxG
t
to maximize the related total proIits oI the system. However. iI the proIits oI the supplier
and the dealer are assured. then .with the development oI society and the
*
2
*
1
k k k < <
economy. more and more enterprises will change their cooperation and non-cooperation
strategy to maximize their proIits Ior the sustainable competitive superiority.
5HIHUHQFHV 5HIHUHQFHV 5HIHUHQFHV
5HIHUHQFHV
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Downloaded 04 May 2011 to 124.3.242.10. Redistribution subject to ASCE license or copyright. Visit http://www.ascelibrary.org