Abstract: The traditional weaponry support function is performed within the military system.Suppliers only provide weapons, thus they have no motive to improve the weaponry reliability.The cost of weaponry support is high.To solve this problem, we bring forward a new mechanism of the entire supply outsourcing based on the performance.The suppliers are responsible for the whole supply chain tasks from providing weapons to weaponry support.The military gives rewards or punishments according to the suppliers' performance.The advantages of this kind of mechanism are analyzed through a principal-agent model.The results show that the military can use certain incentive policies to induce the suppliers to improve the weaponry reliability and meanwhile enhance their incomes.The total cost of the military's weaponry supports al so can be reduced, and the performance of the whole supply chain is improved.

Key words: weaponry support, service outsourcing, principal-agent, service parts inventory