Coordinating And Optimizing The Supply Chain Of Dairy Based On Contract Theory

Dairy is a kind of high nutritional value products. It plays animportant role in our national economy, to upgrade the agriculture industrial structure,to improve the diet structure of urban and rural residents, to enhance people’s physicalfitness and to drive the development of related industries. Nowadays, the dairy marketis not yet fully open, demand has not reached saturation and still has greatdevelopment potential, affected obviously by the promotional efforts. Therefore, it isessential to study the channels’ coordination and optimization of the dairy supplychain. This paper takes the dairy as the research object, considering the demandaffected by the promotional efforts, depicts two-level dairy supply chain channelsconsist of supplier and retailers based on newsvendor model. It obtained that there aredouble marginalization effects in decentralized system through modeling analysis ofdecision-making behavior of each corporate in the supply chain system.First, under the consideration of the retailer promotional efforts, the coordinationand optimization problem of dairy supply chain, analysis of the reasons for the simpleintroduction of the buyback contract can not achieve coordination, thus to amend thecontract model, it can implement the perfect coordination of the system byintroduction of the buyback contract, feedback and the penalty factor. Second, whilesupplier’ promotional efforts influencing the demands, retailers in order to motivatesuppliers, initiative to undertake part of the suppliers’ promotional cost. Finally,compare to the dairy supply chain contract model in the case of the two typepromotional efforts.The study has shown: under the consideration of promotional efforts oninfluencing the demand market environment, In view of the different promotionaleffort main body, to build the corresponding joint contract, it could overcome thedecentralized system under supply chain efficiency, achieve optimal systemperformance of the centralized supply chain and realize the risk sharing. And thecoordinating profit can be distributed reasonably between supplier and retailers; thedetermination depends on game ability and the status of members in supply chain.When the product will be put into market, the supplier undertakes promotion efforts, to the dairy products supply chain coordination effort is more obvious; But when theproduct in the market maturity, the retailer promotional effort will take moreeffective.