Rebate Contract Under The Auto Supply Chain

With the rapid development of automobile industry in our country, auto distribution market has become more and more popular, and the auto brand4S stores have had huge development. Auto brand4S stores’ main business is cars selling and auto after-sales service. In addition to the gross margin in cars selling, a larger proportion of profits come from rebates pay by auto manufacturers. It is very to see that the auto brand4S stores plan a "big promotion" in the fourth quarter.The paper first carried out a detailed investigation and analysis, combing the circulation of vehicles, parts and summarizes the characteristics of the auto sales market; the demand for cars has great flexibility, so the use of rebate contracts can effectively auto retailers’sales efforts and improving auto sales. The "big promotion" conduct by the auto brand4S stores is fundamentally because of the rebates contract and the price elasticity of demand for the car.Secondly, the paper focus on the rebate contract which is common applied in the auto supply chain. A rebate contract model is set up, and contrast the newsboy model with rebate contract, it is found that the rebate strategy can effectively increase the expected profits of the supply chain and achieve supply chain coordination; Analysis of rebate points set influence on profit of supply chain and the retailer profits; Analysis of rebate policy decision variables set, quantitative analysis, through numerical factory rebate contract to develop guidance. Taking into account the needs of the automotive parts depend on vehicle sales, the paper innovatively combines parts sales with traditional rebate contract in Auto supply chain. Combining parts sales rebate contract not only improve the automotive supply chain profits, but also improving the vehicle optimal order quantity. Furthermore improving vehicle sales will promote the sale of parts. Obtained by numerical analysis, efficiency of the rebate contract is enlarged by parts sales. The greater the sales ratio is, the more efficient the rebate contract is.Finally, analyses the "big promotion" of auto sales, established the pricing model during the "big promotion" phase. And through the numerical analysis, the "big promotion" influence retailers’ profits by reduction, market demand and target rebate. Retailers should combine the three factors to choose "big promotion" timing and the discount and pricing strategies.