Promotional Efforts Under Revenue Sharing Contract On Performance Analysis Of Supply Chain

In the21st century, with the rapid development of multinational cooperation and economic globalization, In order to stand out from competition, manufacturing company, marketing company should not only adopt supply chain contract to enhance supply chain performance, but also they should consider the coordination of promotional effort over supply chain performance. By promotional effort, the popularity of products will be improved and market share will be expanded. And then supply chain performance will be improved.In revenue sharing contract, an individual supplier (manufacturing company), an individual shopkeeper (marketing company), and market form three-level supply chain. Manufacturing company and marketing company form promotional effort system. The present paper will research the influence on supply chain performance when manufacturing company and marketing company are making promotional efforts. First, the optimal income of manufacturing company and marketing company will be discussed without promotional efforts in supply chain. Secondly, with promotional efforts in supply chain, theoretical analysis will be made and promotional effort models will be established. The influence on supply chain performance will be researched with the efforts of members in the system. Thirdly, the competition among shopkeepers will be discussed with promotional efforts of numerous shopkeepers. Competition models will be established and analyzed. Finally, examples will be given to verify operability of the models.The conclusions of the present paper are included in the following aspects:I. Market demand will be improved by promotional effort system which is composed by the supplier and shopkeeper. All supply chain members can achieve Pareto improvement. When one side in the system is making promotional efforts, they invariably expect promotional efforts of the other side to realize self-optimization.II. When both of the two sides are making promotional efforts in promotional effort system, positive promotion always occurs. And Pareto optimality will be realized finally.III. When numerous shopkeepers run homogeneous products, the competition will be remitted and maximization of self income can be reached by selecting reasonable geographic location and inputting proper promotional efforts.