Research On Supply Chain Coordination Mechanism Of Innovative Products

With the rapid development of science and technology, the increasingly fierce market competition and personalized consumer demand, the success of an enterprise depends on support and cooperation of partners, especially in an innovative product supply chain. Instability of consumer preferences and demand for innovative products may probably lead to inefficiency of supply chain management.Considering the structure of demand characteristics, out of stock, retailer advertising investment, etc. in innovative product supply chain, with fixed wholesale price this paper proposes order quantity commitment contract model and the buyback contract model based on order quantity commitment, and further analyzes the production quantity decision of supply chain under the first-order and second-order decision respectively. Finally, sensitivity analysis of the models describes the effects of demand uncertainty, advertising effect and minimal commitment ordering on the profits of retailer, manufacturer and the whole supply chain, distribution efficiency and distribution of profit, and production quantity and advertising investment. These findings show that firstly with the production quantity of manufacturer increasing, the total profit of the whole supply chain is no decreasing both in order contract coordination mechanism and buyback contract coordination mechanism. Secondly, there must exist a wholesale price range of the retailer will accept the order quantity commitment contract and buyback contract which the manufacturer proposed in the two order modes. And under the first-order mode, the demand for innovative products with the influence of retailer advertising investment is increasing significantly. Under the second-order mode, this paper does not verify directly because of the more complex situation. Thirdly, the profit levels of manufacturer, retailer and the whole supply chain are positively related to advertising effect and minimal commitment ordering proportion. But the channel operation efficiency is negatively related to demand fluctuation and advertising effect; the relationship between the channel operation efficiency and minimal commitment ordering proportion is increased first and then decreased. The optimal production quantity of the manufactures and advertising investment of the retailers are both negatively related to demand fluctuation, and positively related to advertising effect and minimal commitment ordering proportion. Fourthly, both the construction of the two kinds of supply chain coordination mechanisms can improve the profit levels of manufacturer, retailer and the whole supply chain and the double marginal effect. This provides theoretical and practical supports for the design of supply chain coordination mechanism of product innovation.