Study On Profit-sharing Contract In Supply Chain Coordination

Supply chain management is an integrative philosophy to improve the whole supply chain performance through cooperation and coordination among supply chain members. The "bullwhip effect" and "double marginalization" result in disaccord between their local interests and the supply chain goal, with which have brought about the decline of the supply chain performance. Therefore, there must be have effective coordination mechanism to standardize the behavior of members, to make the profit in decentralized decision-making to the integrated supply chain performance, thus achieving the supply chain coordination. Contract is an important way to achieve coordination of the supply chain.Based on the research in home and abroad, the thesis pursues an in-depth research on profit-sharing contract in supply chain coordination. Details are as follows: Based on a detailed analysis on the related concepts of SC and SCM, supply chain coordination, considering two-stage supply chain, the paper designs specifically profit-sharing contract decision-making model under different circumstances different, and then analysis the results. Firstly, the paper studies the supply chain between a supplier and a retailer, builds profit-sharing contract model under elasticity demand, numerical example indicates than this contract can improve both profit and achieve coordination, then discusses the condition contract being put into practice and profit assignment problem. Secondly, the paper studies the profit-sharing contract between many retailers under linearity demand, results illustrate that this contract can improve such supply chain achievement. At last, the thesis studies profit-sharing contract under Newsvendor Problem and expanding Newsvendor Problem, results indicate that supply chain involved one retailer with inventory can be able to improve coordination by designing proper profit-sharing contract.