SCM Implementation Decisions of Principal-Agent under Asymmetric Information

The optimization investment policy decision of SCM-Supply Chain Management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation options’ decision optimizing models have been developed. In these models, both clients and vendors try to pursue their own benefits. Based upon the principal-agent theory, the models show to what extent a principal (a client) needs to pay more to an agent (a vendor) in a context of asymmetric information. For the client, it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system. The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.

Study on Pollution Cost Control Model under Asymmetric Information Based on Principal Agent

Pollution cost control is key to solve pollution problem.The paper takes pollution control cost of pollution control contract between management authority and pollutant discharge enterprise as research object,considers pollution control quality level,pollution control quality inspection and pollution control cost model,and establishes pollution control cost model of management authority and pollutant discharge enterprise,including rational constraints of pollutant discharge enterprise.And it analyzes principal-agent relationship between the two under condition of asymmetric information,and un-observability of pollution control level is shown as hiding information of sewage enterprises.In essence,it is problem of adverse selection in principal-agent.Pollution control cost of management is objective function.The first order condition of pollution control cost of sewage enterprise is transformed into state space equation,and optimal control of problem is solved by using maximum principle.In particular,management authority,as principal,uses pollution control provisions to reward,punish and encourage pollutant discharge enterprises as agents.

SCM Implementation Decisions Under Asymmetric Information: An Agency Approach

The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions.For both conditions,SCM implementation optional decision optimizing models have been developed.In these models,both clients and vendors try to pursue their own benefits.Based upon the principal-agent theory,the models show to what extent a principal(a client)needs to pay more to an agent(a vendor)in a context of asymmetric information.For the client it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system.The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.