Research On Two-Tier Supply Chain Coordination Based On Delay In Payment

As an effective management style in the global marketing competitiveness, Supply Chain Management emphasis on the cooperation and coordination between enterprises. However, in reality the supply chain members are independent of each other. They make their decisions in order of maximizing own interest, which lead the overall profits of the supply chain to be damaged inevitably. Supply chain coordination is a solution that proposed to minimize the damage. One of the mechanisms to achieve this goal is Delay in Payment. Delay in Payment is a contract that suppliers provide retailers a different time period for payment with the different amount of orders. Generally, delay period for payment increased as the order extended.In this paper, firstly, the theory of the supply chain coordination reviewed, then summarized into general ideas and methods to solve supply chain coordination models. And in the third part, we established supply chain coordination model with certainty demand based on the strategy of delay in payment. Then analyzed the profit function of the supply chain members respectively, used Stackelberg Game to obtain optimal delay decision of supplier and order quantity of retailer, and made a practical example to verify the model results and gave out impact of the overall profits that the delay in payment take to the supply chain. In order to study more practical significance, the fourth part of this paper took into account of the contract of delay in payment with stochastic demand. Via making analysis to the supply chain members, we gained performances of supply chain systems which adopt delay contract whether or not. And finally used simulation methods of delay in payment can improve the supply chain coordination.This study confirmed the adoption of delay in payment contract can improve coordination of supply chain coordination, providing some theory basis for and the practice of contract design. Through the regulation of contract parameters, the contract of delay in payment, designed reasonably, can be effective in promoting cooperation on the parts of the supply chain.