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Operation decision of logistics service supply chain: considering interruption probability in emergencies

Guangsheng Zhang (School of Management, Zhejiang University of Technology, Hangzhou, China) (Shandong Management University, Jinan, China)
Xiao Wang (International Business School Suzhou, Xi'an Jiaotong-Liverpool University, Suzhou, China)
Zhiqing Meng (School of Management, Zhejiang University of Technology, Hangzhou, China)
Qirui Zhang (Business School, Ningbo University, Ningbo, China)
Kexin Wu (International Business School Suzhou, Xi'an Jiaotong-Liverpool University, Suzhou, China)

Kybernetes

ISSN: 0368-492X

Article publication date: 13 October 2021

Issue publication date: 17 January 2023

136

Abstract

Purpose

To remedy the inherent defect in current research that focuses only on a single type of participants, this paper endeavors to look into the situation as an evolutionary game between a representative Logistics Service Integrator (LSI) and a representative Functional Logistics Service Provider (FLSP) in an environment with sudden crisis and tries to analyze how LSI supervises FLSP's operations and how FLSP responds in a recurrent pattern with different interruption probabilities.

Design/methodology/approach

Regarding the risks of supply chain interruption in emergencies, this paper develops a two-level model of single LSI and single FLSP, using Evolutionary Game theory to analyze their optimal decision-making, as well as their strategic behaviors on different risk levels regarding the interruption probability to achieve the optimal return with bounded rationality.

Findings

The results show that on a low-risk level, if LSI increases the degree of punishment, it will fail to enhance FLSP's operational activeness in the long term; when the risk rises to an intermediate level, a circular game occurs between LSI and FLSP; and on a high level of risk, FLSP will actively take actions, and its functional probability further impacts LSI's strategic choices. Finally, this paper analyzes the moderating impact of punishment intensity and social reputation loss on the evolutionary model in emergencies and provides relevant managerial implications.

Originality/value

First, by taking both interruption probability and emergencies into consideration, this paper explores the interactions among the factors relevant to LSI's and FLSP's optimal decision-making. Second, this paper analyzes the optimal evolutionary game strategies of LSI and FLSP with different interruption probability and the range of their optimal strategies. Third, the findings of this paper provide valuable implications for relevant practices, such that the punishment intensity and social reputation loss determine the optimal strategies of LSI and FLSP, and thus it is an effective vehicle for LSSC system administrator to achieve the maximum efficiency of the system.

Keywords

Acknowledgements

The authors gratefully acknowledge the supports provided by the Post-doctoral Science Foundation of China (2019M662109), the Natural Science Foundation of China (11871434) and Doctoral research of Shandong Management University.

Citation

Zhang, G., Wang, X., Meng, Z., Zhang, Q. and Wu, K. (2023), "Operation decision of logistics service supply chain: considering interruption probability in emergencies", Kybernetes, Vol. 52 No. 1, pp. 284-303. https://doi.org/10.1108/K-07-2021-0580

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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