Research On Consignment Contract Decision - Making Considering Customer Preference And Demand Mutation In Electric Business Environment

This paper studies the consignment supply chain under the e-commerce environment.Considering consumer’s preference for quality of a kind of product provided by two suppliers, Hotelling model is utilized to present two suppliers’ market share.Establishing a Stackelberg game model with equilibrium constraints. In this model, the retailer act as a leader, and the two non-cooperative competing suppliers are followers. By solving the model, the two suppliers’ equilibrium retail price can be calculated and the retailer’s optimal consignment contract can be worked out. The conclusions show that,there is a proportional relationship between retail price and revenue sharing ratio. Under certain conditions, the difference between the two suppliers’ profits increased when its product cost difference decreased. To seize the market, the supplier with high-quality merchandise prefer the consignment contract with lower revenue sharing ratio, and the supplier with low-quality goods prefer the consignment contract with a high proportion of revenue sharing.Then, establishing a Stackelberg game model after demand disruptions based on the existing model, worked out the retailer’s optimal consignment contract and compared the two suppliers’ equilibrium retail price and market share with and without demand disruptions. The conclusions show that, after demand disruptions, the market share increased of the supplier with high-quality merchandise when the increased demand supplied by the two suppliers, while the share of the supplier with low-quality goods may increase or may decrease. When the increased demand supplied by only one of the supplier, the other supplier’s balanced market share won’t change, however, it’s reaction function of retail price will change. There is a proportional relationship between retail price and revenue sharing ratio regardless of whether or not the demand disruption.