Study On Supply Chain Coordination About The Revenue Sharing Contract Based On The Option Theory

For supply chain cooperation and coordination ,the paper choose supply chain contracts to coordinate supply chain. Especially,we focus on the revenue-sharing contract based on the option theory to research the portfolio contract model .First,the paper discusses 2-stage supply chain under revenue sharing contract and sets up the simple mathematical model.Based on the revenue sharing contract about one supplier and one retailer an option decision making model is set up by inducing option mechanism. Furthermore, a design problem of the supply chain mechanism is discussed. The research indicates that the supplier and retailer's profit is boosted at the same time by establishing appropriate executed price of option and a proper percentage of revenue. In addition, the optimal order quantities and the option quantities that make supply chain's aggregate profit maximized will be found and supply chain's coordination will be achieved and the economy efficiency will be enhanced.For a 3-stage supply chain system made of a manufacturer ,a distributor and a retailer,the paper studies the revenue sharing contract based on option to purchase the supply chain coordination, through establishing reasonable contract parameters with the retailer and the distributor order the same quantity .Accodring to the numerical examples,the decision models are simulated in order to verify the effective of the conclusions.