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《Journal of Industrial Engineering and Engineering Management》 2012-02
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Project-based Supply Chain Cross-organizational Incentives Based on Duration-Quality Coordinative Equilibrium

SHI Jian-gang,WU Guang-dong,TANG Dai-zhong(School of economics and management,Tongji University,Shanghai 200092,China)  
Both duration and quality are important objects in the project-based supply chain because they can influence project fulfillment.Constructing schedule needs to take the project quality control into consideration. Reasonable scheduling can ensure the timely completion of a project,guarantee necessary project quality,and follow the project value-adding procedure to improve quality. Traditional project-based organizations tend to consider project value-adding activities from the single perspective of either duration or quality.This approach can result in grossly inefficiency procurement of project value-adding objects.The paper firstly takes the cost substitutability of duration and quality objects into consideration from the project value-adding perspective,and uses different project control objects as incentives.Finally,it analyzes the influence of coordination equilibrium between duration and quality on project value-added objects. Based on the assumption of equal cooperation in project-based organizations,this paper investigates the incentive of all project controlling goals between project management enterprise and contractors.With project value appreciation maximized,the relationship between the project object and effort cost is taken into consideration and project-based supply chain cross-organizational incentive model of cooperative duration-quality object is established.The research result shows that project-based supply chain cross-organizational cooperation works in practice as follows:(1) Either the duration-quality coordinative objective incentive or single objective incentive can promote the project value level,increasing the net benefit of project management enterprise and contractor;(2)Whether the linear relationship between duration and quality object exists or not,executing the duration-quality coordinative objective incentive obtains higher project value-adding level than single ones,and so does the net benefit for project management enterprise and contractor;(3) Under the duration-quality coordinative equilibrium,project management enterprise and contractor possessing the best effort level and incentive intensity on different control objects can maximize project's values;(4) In contrast to duration-quality coordinative equilibrium objective incentive,single objective incentive method improves the project value at the price of another controlled object incentive loss.In particular,increasing one objective incentive intensity will absolutely decrease the other;and(5) Essentially the contractor undertakes more risks than project management enterprise.Thus,the contractor is more willing to choose duration-quality coordinative equilibrium incentive in order to obtain a lager profit and improve the two control objects. Therefore,whether the linear relationship between duration and quality exists or not,the project management enterprise resorting to adjust project object objective incentive intensity and implementing duration-quality coordinative incentive strategy could not only achieve project value-adding maximization,but also realize net earnings,and Pareto improvement between project management enterprise and contractor.These benefits can make the contractor reasonably allocate the effort level and resources between the duration and quality objective,and realize duration-quality coordinative equilibrium. This paper enriches and improves the theory and system of supply chain incentives,contributes to project cooperative environment,and provides reliable theoretical guidance and decision support for objective incentives in project management to add value to projects.
【Fund】: 国家自然科学基金资助项目(70903051)
【CateGory Index】: F224;F284
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