Study On Supply Chain Sale-Surety Contract Based On Options

With the development of science-technology and economy, enterprise would face with furious competition. In answer to market competition availably, enterprise should reinforce cooperation and enhance competitive advantage. In a supply chain, because the enterprises are all self-governed economic entities, there is much marginalization in cooperation, which makes cooperation difficult for them. So it brings forward higher request for supply chain contract design, and the supply chain contract becomes the key factor of whether realize supply chain coordination effictively. So, based on the exist research, the paper constructs supply chain sale-surety contract based on options, in which we introduce effort level and risk diversity.Firstly, the paper has contrasted supply chain sale-surety contract based on options with buyback contract, rebate and penalty contract and revenue sharing contract in theory. Secondly, it's pointed out that the key factors must take into account in the concrete application, which are the status and information symmetry in game, retailer's effort level and risk preference of decision-making. Finally, the paper studies the influence of supply chain sale-surety contract based on options to supplier, retailer and supply chain, as well as effort factor and risk preference of decision-making to the contract. Accordingly, the paper has mainly done the following research work:No.1, according to the massive correlation literature summary and the refinement, the domestic and foreign related supply chain contract research is reviewed roundly, and the insufficiency and the pending thorough research question in the current supply chain contract research are pointed out. Then we introduced the paper's research content.No.2, the paper's research foundation is discussed. We analyze the similarities and differences between supply chain sale-surety contract based on options and other exist related contracts, and then discuss the factor which must be considered in the supply chain sale-surety contract based on options concrete application, and established a conceptual model of supply chain sale-surety contract based on options. All all which build up the foundation for the following chapter's research.No.3, the paper studies the basic model of supply chain sale-surety contract based on options. At the beginning of quantification research, we firstly establish the basic model of supply chain sale-surety contract based on options, and conduct the research to this model, which mainly includes: the price decision of sale-surety option, the supplier's optimal option purchasing quantity and production batch, and the influence of the contract to retailer's risk and revenue, the influence of the contract toretailer's and supplier's risk and revenue, and supply chain coordination. The basic model correlation research will be the foundation of the following chapter quantification research.No.4, the paper researches the effort level's impact on supply chain sale-surety contract based on options. In real life the retailer's effort is one of the important factors that affects the level of market demand. In fact not only the retailer's marketing efforts (advertising, promotion) can affect demand, but also the supplier's production efforts (to increase R&D investment, and improve after-sales service quality) can do. Therefore, based on the study, we put effort level into the basic model, and we study the optimization problem of retailer, supplier, as well as supply chain decision-making on the condition of considering the marketdemand and effort level.No.5, we study the impact of risk preference of decision-making on supply chain sale-surety contract based on options. In real life, people have different attitudes to decision-making. Therefore, based on the study, we put the risk preference of decision-making into the basic model (assume supplier and retailer with the same characteristics of the absolute risk aversion) and using Pratt-Arrow's absolute risk aversion coefficient scores the risk cost, by which we modify supplier's and retailer's decision-making avail function and study the impact of risk preference of decision-making on supply chain sale-surety contract based on options.No.6, we study the impact of level and the risk preference of decision-making on supply chain sale-surety contract based on options. As in real life, the effort level of retailer and the risk preference of decision-making both affect supplier's and retailer's decision-making at the same time, it is difficult to separate those impacts from each other. Therefore, based on the above research, we put effort level and the risk preference of decision-making into the contract model and study their impact on the supply chain contract.No.7, the paper provides numerical case analysis for each decision-making model. By numerical example, the paper does simulation analysis and verifies the validity of the conclusions.