Influence of the Chinese Government Subsidy Policies on Supply Chain Members’ Profits: An Agent-Based Modeling and Simulation Approach

The series of subsidy policies launched by the Chinese government has affected supply chain members’ profits distribution. To explore this influence, an agent-based model was designed, and experiments were conducted under different subsidy levels. Our model focused on the ordinary business entities and their activities in the supply chain. By investigating the real world and other researchers’ studies, agent simulation class library (e.g., control agents, cooperation/collaboration agents, and fractal simulation agents) and their decision knowledge bases were designed to simulate the supply chain members’ behaviors, decision processes, and operation and production activities and behaviors. Price model, demand model and profit model under the subsidy were built to evaluate the supply chain members’ profits under different subsidy scenarios. Finally, a multi-echelon appliance supply chain model was constructed, and experiments were performed with different levels of subsidy limit. Results showed that the supply chain members’ profits increased under the government subsidy policy. The agent-based modeling and simulation method provides a novel approach to explore the impact on profit distribution.