Abstract: By applying the Principal-agent theory, the paper researches the problem of how the government can encourage enterprises to reduce inventory cost of emergency materials when the government delegates enterprise as an agent of reserving emergency materials and under the existence of moral hazard. First, this paper analyzes inventory cost constitution of the government and enterprises in different circumstances; second, this paper establishes the government expected utility maximization model, which meets enterprise participation constraint and incentive compatibility constraint, after the government uses tendering mechanism to integrate operation with procurement and inventory of emergency materials; finally, by using genetic algorithms the paper carries out simulations, and takes an example to analyze government and enterprise costs in different circumstances. The results show that the implementation of the incentive can significantly increase the expected utility of the government.