The Study Of Supply Chain Contract Based On Option

As the supply chain is composed of a number of enterprises, thereare some conflicts at interest distribution and risk exposure. The businessinterest of the supply chain members is often not consistent with the totalsupply chain system. These lead to the supply chain doublemarginalization to reduce the overall supply chain profit and theindividual members profit. Coordination between members of the supplychain is the core issue of supply chain management. Therefore, it is ofgreat significance to design a reasonable supply chain contract to adjustthe volume of orders in response to the market demand more accurately,improve the efficiency of supply chain and coordinate the interests amongthe partners reasonably. This paper took the option as a research tool anda two-level supply chain system composed of a single retailer and a singlesupplier as the research object. This paper establishes contrast betweenretailer dominated supply chain option contract and the leading suppliersof supply chain contract model.Firstly, the paper studies the supply chain based on option contractmodel which is dominated by the supplier. The study found that optioncontracts can realize supply chain coordination, and may change thesupply chain profit allocation proportion to equilibrium by adjusting theoption purchase price and the strike price, which proves the validity ofthe option contract. Secondly, the paper studies the supply chain based on optioncontract model which is dominated by the retailer. Under the conditionthat the basic model can’t achieve supply chain coordination, the paperanalyzes the suppliers and retailers under the model of decision-makingprocess, and takes into account the impact of effort factor on suppliersand retailers, and brings in the revenue sharing and the cost sharingstrategy to modify the basic model. The analysis further found that thesupply chain can realize coordination when the rate of revenue sharingand cost share proportion meet a certain condition.Finally, the main contents of this paper are summarized and severaldirections for future research are provided.