Author(s)

Lina Wang^1,2, Stephan Poelmans³, Koen Milis⁴

¹Economy & Management School, Hainan Normal University, Haikou, China.
²Management School, Liaoning University of Technology, Jinzhou, China.
³Faculty of Economics and Management, Hogeschool-Universiteit Brussel, KULeuven Association, Brussel, Belgium.
⁴Education Management Industry, Campus Vesta, Brussels, Belgium.

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.

SCM Implementation Problems, Asymmetric Information, Implementation Control Cost, Evaluation Level, Principal-Agent Theory

Wang, L. , Poelmans, S. and Milis, K. (2019) SCM Implementation Decisions of Principal-Agent under Asymmetric Information. Open Journal of Applied Sciences, 9, 159-171. doi: 10.4236/ojapps.2019.94014.