Author(s)

Xiaoying Yang, Qingxia Xie, Chuwang Wen

Corresponding Author

Xiaoying Yang

ABSTRACT

The iron and steel industry plays a pivotal role in China's industrial development, this article builds a closed supply chain of producers, sellers, and consumers for the current situation of steel sales model and existing problems in China. In order to enable steel companies to respond to direct sales and agents in different market changes, under the circumstances of recycling, the incentive mechanism model of principal-agent/direct sales is constructed. Then this article studied the relationship between expected returns of steel producers, market uncertainties, incentive factors, risk aversion factors, and effort costs. The research results have very important practical significance for the development and management of China's steel sales chain.

KEYWORDS

Steel sales, closed supply chain, direct sales, commission-agent, incentive mechanism