Optimal Logistics Service Capacity Sourcing with Demand Information Updates

In order to obtain optimal capacity for logistics service integrator(LSI)in the condition of demand information updating and supply capacity constrained,the three stages,sourcing decision model is established.We analyze subcontractor cost,capacity flexibility and the effect of LSI's demand information management capability parameters variation on optimal sourcing strategy.As LSI demand information management capability increases,lower cost subcontractor is chosen more than capacity flexibility,which will help LSI decrease operation cost and increase expected revenue.