Research on Misrepresentation-Proof Strategies in Supply Chain

False representation prevention is an important issue in supply chain when core member collects information from other partners. This paper aims at proposing optimal strategies to prevent false representation in supply chain. It is supposed that the core member of supply chain can know the truth by inspection but can not inspect all reports of partners due to the high cost of inspection, and the core member will announce penalty rules and the corresponding probability of doing inspection for preventing false representation. After formulating three penalty rules, the minimal inspection probability required for inducing true information under each penalty rule is given. Trace back policy requires the same inspection probability as non-memory policy to prevent false representation effectively and efficiently, excuse-denial trace back policy requires smaller inspection probability.