Decision analysis of just-in-time delivery incentive contract based on Stackelberg model

Just-in-time (JIT) purchasing is an important approach to shorten the response time of supply chain efficiently and implement the agile operation of supply chain. How to quantitatively formulate and analyze the dynamic interactive relation between the strategies of purchaser and supplier is an important base of supply chain coordinated planning and decision-making. On the purpose of increasing the probability of delivery on time, with purchaser as leader and supplier as follower, this paper establishes the two-stage Stackelberg model about dynamic interactive decision-making behaviors between purchaser and supplier. The existence requirement of optimum solution is formulated and analyzed, and the interactive influencing between decision variables of purchaser and supplier and the interactive influencing between decision variables and inventory cost parameters are analyzed and inferred theoretically. The results can help for purchaser and supplier to determine corresponding incentive strategies of purchase and supply respectively.