Research On Supply Chain Coordination Based On Portfolio Contracts

There is a variety of risks in supply chain procurement process. The research on how to cut down the procurement cost and reduce procurement risks by procurement contracts is significant. In this paper, we carry study on which contract will be more effective to reduce procurement risk and improve supply chain performance. Basing on the literature review, by analyzing and comparing the existing domestic and international literature of supply chain procurement contracts, this paper makes a comparison on both the advantages and disadvantages of the various contracts. And the point is how to avoid the defects of a single contract through portfolio contracts, thereby reduce business operations risk, increase business revenue and enhance the competitiveness of enterprises. At present, there are few studies on portfolio contracts, which have a large research space and research value.Basing on the study of previous researches, the paper summarizes the contents and development trends of purchasing management, and sum up the types of purchasing risk and methods of risk management in supply chain. Then compares several basic procurement contracts, and expand the types of portfolio of contracts to do research. By studying, gains the portfolio contracts that can enhance supply chain performance more effectively. In the end, carries on numerical experiments on the above theoretical research and simulates to validate the theory.The main outcome and research work of this paper are as follows:Firstly, this paper summarizes the related theories of supply chain management and supply chain purchasing management. Then, the paper introduces the current research of supply chain coordination and supply chain procurement contracts. At last, points out that supply chain portfolio contracts is the keystone of this research, and makes a detailed study on the status quo of a few basic procurement contracts and portfolio contracts.Beginning from the purchase risk which is the object to be resolved by supply chain procurement contracts, this paper introduces the major risks that supply chain purchasing process may faces, and outlines the main measures to deal with those risks.Starting with the basic mathematical model, the paper compares the advantages and disadvantages of several basic procurement contracts, and whether they can coordinate the supply chain. Introduces the concept of supply chain portfolio contracts, and briefly describes the application and research significance of portfolio contracts, which is the theoretical basis of the model established later.This paper models the portfolio contracts which consist of the option contract and the buy back contract. The portfolio contracts can solve the problem that the buy back contract can't coordinate the supply chain. By further formula derivation, the paper finds out the retailer's optimal fixed order quantity and the optimal option reservation quantity, it also gets the optimal option reservation price for the supplier. In order to avoid the defects of supply chain contracts, this paper establishes an portfolio contracts composed of option contract and spot market, then derives the optimal order quantity and other decisions to coordinate supply chain. Finally, carry on numerical tests about the conclusion obtained from the mathematical model and give intuitive charts.There are many other factors affecting the supply chain profit. Both on the condition of demand relativity to the effort factor and to the retail price, this paper models and analyzes the options contract, moreover identifies the solution.Sum up the main work of this paper, and carry out a preliminary prospect on the research trends of supply chain portfolio contracts.