Profit distribution model of integrated logistics service provider based on principal-agent theory

This paper puts forward a new profit distribution model of integrated logistics service provider, which takes into account the cooperation effort between an integrated enterprise and the other logistics service providers which has significant effect on the integrator´s performance. By using principal-agent theory the expressions of incentive coefficient are derived. Relationships are observed between incentive coefficient and several cooperative parameters of integrated enterprise and its logistics service providers. These parameters include: production capacity, cooperative investment, cooperative cost, cooperative risk, and cooperation effort. The result indicates that integrated enterprise gives more incentive payments to service provider and more competitive integrators.