The Research Of Supply Chain Contract Model

A supply chain is called coordinated under a contract mechanism if the contract makes the optimal solution of the supply chain be a Nash equilibrium of supply chain. In other words, the suppliers and the retailers in the supplier chain can maximize the benefits of the whole supply chain, meanwhile make their own benefits more than the best benefits without coordination. This means that the supply chain coordination can make the members of the supply chain earn more benefits while maximize the benefits of the whole supply chain. The supply chain contract has been one of the most effective coordinate strategies in the supply. The supply chain contract coordination optimize the supply chain through information sharing, stimulating strategies, etc. The members in the supply chain share the risk and profits of the supply chain.In this paper, we study the contract coordination of the two level supply chain. We are particularly concerned with the case where the members in the supply chain of risk-aversion.To measure the risk of supply chain members, for risk-averse companies, we measure supply chain risk by the use of the mean-variance theory model which is similar to portfolio theory. We establish corresponding supply chain coordination mechanism model of revenue sharing contract. Without assuming that retailer's revenue obey the normal distribution, we show that the best revenue-sharing ratio coefficient is the same. We then further study the optimal revenue-sharing contract and the revenue-sharing contract in decentralized supply chains.Out of stock or sales losses are important issues that many enterprises have to face. Another concern of this paper is to study coordination of the two level supply chain with shortage. Consider the case where the supplier's capacity could not meet the requirement of the retailer's annual demand. In this case, the supplier has two choices to meet the retailer's requirement:buy the same quantity of products from other places, or consul with retailers. In case the supplier could not provide the ordered product, the supplier promise to give a price discount to compensate the loss of profit caused by the product shortage. For this kind of supply chain coordination, we derive a range of discount price under supply chain coordination. Finally, we do some numerical experiments to demonstrate the effectiveness and the feasibility of the contract.