Supply Chain Coordination Of Quantity Discount Contract Under Uncertain Demand

Since the reform and opening up, China's GDP continued to increase, gross domestic product (GDP) in 2010 surpassed Japan to become the second largest economy in the world, with manufacturing plays a decisive role in China's economic development. While the rapid development of the manufacturing, excess manufacturing capacity, the backlog of goods, falling profits increasingly become a significant phenomenon. Manufacturing industry solve the production capacity issues, increase market supply, expand market demand,these requirements is imperative.Based on supply chain competitive of manufacturing industry, seeking behavior relations between manufacturers and retailers, further addressing the capacity problem of industry organizations,improving capacity utilization, promote economic efficiency increased, it is the effective measures of the manufacturing industry to address the development.In this paper, game theory and information economics is the research methods, setting up the Quantity Discount Contract under uncertainty market demand,and solving the corresponding business decisions of the dynamic game between the retailers and the suppliers. Useing the method of marginal analysis and comparison analysis, analysing and discussing he Nash equilibrium, giving the supply chain industry organizations the meaningful decision-making.First, under the determine market demand,propoesd the view that the price discount contract shound have a definite order quantity of retailer.and the starting point should be the optimal order quantity of retailers when the manufacturer don't use the price discount contract to the retailers, meet the incentive participation constraint need of retailers and the incentive compatibility constraint of manufacturers, and on this basis proposes a price discount contract with a price discount threshold to realize the coordination of supply chain.Secondly,when the market demand is uncertain,establishing a dynamic game model of supply chain coordination,which is the price discount contract with a price discount threshold,and solving the dynamic game model at the situation which the market demand function for the case of uniform distribution,an analysis of equilibrium show under uncertain market demand, the price discount contract can increase the order quantity of retailers, and achieve the profits Pareto improvement of the supply chain,that means it anchive the supply chain coordination.Finally, as the retailer promotional effort can affect the function of market demand, establishing a dynamic game model of supply chain coordination,which is the price discount contract with a price discount threshold,solving the optimal order quantity, best promotional effort level and the discount rate and making a marginal analysis.Equilibrium analysis showed that the price discount contract under the uncertain demand which is influnenced by promotional efforts, the promotional efforts can increase demand, but also can increase the amount ordered of retailers.the total revenue of the supply chain is higher than the sitiation without promotional efforts,it can make a supply chain coordination.These conclusions have a positive reference to the manufacturer which have a high capacity to develop spatial planning,it should use the price discount contract to coordinate the retailer's retail ordering decisions and promotional efforts to play productivity effect,and increase their profits and the total profits of supply chain profits.