Supply Chain Coordination With Optimal Price Incentive Contract

Forty years of reform and open up has greatly increased the total amount of China's economy. China has become a very important economy in the world. The development of China's economy has attracted worldwide attention. Some inappropriate and unreasonable growth model caused the some prominent problems which China faces, such as the increasingly tight constraints on resources and environment, serious excess capacity and mismatch between supply and demand. China's economic and social development need reasonable expansion of demand and increase supply side structural reform, which goal is to enhance the quality and efficiency of the supply system of the products and service. That is to seize the productivity and production relations, the law of contradiction movement in productivity to deepen the reform in an all-round way. Reasearching product supply chain to explore how the relationship between enterprise price strategy and the performance in equilibrium state to improve supply efficiency, provide better quality products and service and to achieve the economic benefit Pareto improvement of the enterprises in the industrial organization is the proper meaning of the supply side reforms.The research methods of this paper are game theory and information economics in the optimal incentive theory. Using game theory to research how to design the optimal price incentive contract to achieve the firm's profit Pareto improvement, that is supply chain coordination. First of all, this paper analyzes the feasibility of using optimal sales price incentive contract to coordinate price and promote profit. From the simple single supply chain, this paper design optimal sale price incentive contract offered by manufacturer, set and solve related dynamic game model. The comparison analysis proves that the optimal sales price incentive contract has a good supply chain coordination effect, thus proving the effectiveness of our research ideas. Secondly, in the more general situation of the two supply chain with the price competition. Design multi tasks optimal incentive contract offered by remanufacturer to retailer of different products of different optimal sales price, establishing and solving the corresponding dynamic game model. The comparison analysis also proves that the optimal sales price incentive contract can achieve difference product competition of supply chain coordination. Finally, focusing on a general closed-loop supply chain in circular economy, designing optimal recycle price incentive contract. The comparative analysis proves that optimal recycle price incentive contract can achieve closed-loop supply chain coordination. So it is proved that the optimal price incentive contract established by this paper is able to adapt to a variety of typical industrial organizations as a new kind of supply chain incentive method.The optimal price incentive contract is a new supply chain coordination method. It provides an effective way to achieve supply chain coordination and improve the efficiency of the supply system, alternative modes for the related enterprises' management decision and industrial policy and a reference for supply side structural reform from the industrial organization perspective.