Research On Revenue Sharing Contract In Supply Chain Under Time-and-Price-Sensitive Demand

With the development of economic globalization, only when enterprises in supply chain establish cooperation relations of mutual trust, can they be more competitive in the complicated environment. The reasonable distribution of the revenue in the supply chain is the key to a successful cooperation between the members in the chain. But due to the pursuit of the maximization of individual income of each member in supply chain, it is difficult to maintain the cooperation. Therefore, researches on how to develop an appropriate contract according to different structure characteristics of supply chain to regulate and guarantee the cooperation between enterprises have important theoretical and realistic significance. Revenue sharing contract is a contract of supply chain based on reasonable profit distribution. Market demand is considered as one of the important factors for building revenue sharing contract models. Most existing researches are considering only a single factor which affects the market demand such as the factor of price or quantity when setting up models of supply chain revenue sharing contract to study the cooperation between each other. Or considering time-and-price-sensitive demand but only researching the comparisons of centralized and decentralized decision-making based on the maximization of supply chain overall income without considering how companies make decisions according to the revenue sharing contract under the influence of response time and how it affects the profit distribution of the supply chain.In this paper, based on the perspective of time-and-price-sensitive demand, we use Stackelberg Game model to research revenue sharing contract both of supplier-leading and retailer-leading supply chain. For maximizing the profit of the dominate enterprise and the whole supply chain, we set up the revenue sharing contract model and find out the optimal solution of the revenue sharing contract in both kinds of the supply chain, including sales price, wholesale price, response time and the allocation ratio which realize the maximization of the benefits of leading enterprise and the supply chain as a whole. Then we analyze how the average delivery time of the supplier and product transportation time of the retailer impact the revenue sharing contract, saying price, market demand, and expected profit. We find out that the market demand, the supplier’s expected profit and the supply chain’s expected profit decease with the increase of product transportation time, and decease with the increase of the average delivery time. Besides, compared with the retailer-decided product transportation time, the supplier-decided average delivery time has a greater influence on the market demand. Finally we compare the two leading supply chain revenue sharing contract and find out that in the supplier-leading supply chain, the allocation ratio does not change along with the change of the product transportation time and the average delivery time while in the retailer-leading supply chain, it increases when the product transportation time increases and decreases when the average delivery time decreases. Both of the supplier-leading supply chain and the RRS retailer-leading supply chain could achieve to the same optimal target through the revenue sharing contract when the product transportation time changes and the average delivery time is certain. Otherwise, the overall expected profit of the supplier-leading supply chain is more than that of the retailer-leading supply chain when the average delivery time changes and the product transportation time is certain. With the numerical analysis, we verify the optimal solution specifically and effectively.