Research On Coordination Mechanism For VMI Supply Chain Based On Revenue Sharing Contract

With the global economic integration and the development of science and technology, Competition among enterprises is gradually increasing, and competition among enterprises has been transformed into the competition between supply chains.In this context, supply chain management as a new business management model is emerged. The core idea of supply chain management performance as "cooperation,win-win,integrated", which requires to establish a collaborative relationship between each enterprises in the supply chain.Inventory management is an important part of supply chain management。The inventory management of the enterprise not only decides, but also restricts the integrated cost, the whole performance and competition advantage. The traditional inventory management mode which is local optimum and serially linked now is gradually changed to a new inventory management under supply chain strategy partnership. So some new inventory management methods have emerged, Vendor Managed Inventory,a new model which reflects the integrated idea of supply chain management,enjoys much concern among academics and business.After a great deal of research on VMI, scholars have found a simple vendor-managed inventory model can improve the overall benefits of the supply chain, but the supplier have to bear the inventory risk of the unmarketable goods, the supply chain is in a state of inefficiencies due to the double marginal effect still exists. Therefore, the appropriate contract need to be implemented to distribute the benefits, and make the supply chain to reach coordination and cooperation.Basing on revenue-sharing contract, this paper studies the benefits distribution model and strategy under retailer manage inventory model and supplier managed inventory model. Firstly, it expatiates the background, significance, the related research and theories about the coordination mechanism in supply chain. The following content discusses the revenue-sharing contract in RMI supply chain, which eliminates the "double marginalization" effect impact, increases overall revenue of supply chain as well as two partners'revenue, and supply chain reaches coordination. Then this paper discusses the VMI supply chain, as the bargaining power of retailer and supplier is different, so the wholesale price contract can't coordinate the supply chain. By the implementation of revenue sharing contract, also makes the supply chain reach coordination; when wholesale price equal to zero in VMI supply chain, the supply chain also can reach coordination through the contract which based on revenue sharing contract with a surplus subsidy factor together, and get a pareto optimum interval of revenue-distributed proportion. Finally, the paper verifies those math models and conclusions through simulation.At the end of the paper, whole content was summarized, important conclusion and the limitation of the study were described, and the future research direction was discussed and prospected.