Stackelberg model and decision analysis of just-in-time purchasing in supply chain

Just-in-Time (JIT) purchasing can shorten the response time of supply chain efficiency, respond requirement in the market rapidly, and implement the agile operation of supply chain. Furthermore, delivery on time is the bottle-neck problem of supply chain agile operation in practice. For increasing the probability of delivery on time by incentive mechanism effectively, this paper establishes the two stage Stackelberg model, with purchaser as leader and supplier as follower. On the basis of analysis of optimum, we discuss the interactive relationship between purchaser and supplier in contract decision of purchase. On the assumption that response time the supplier fulfils the order obeys exponential distribution, we argue the strategy of optimum decision of purchaser and supplier, and analyze the effect that inventory cost parameters impact on contract decision.