Supply Chain Coordination With Retail Price And Product Quality Dependent Demand

With the rapid development of technology and international trade, the factors of production are moving fast and the world becomes more and more flat. This has brought a broader market, but also has brought a more brutal competition. The division of labor with capital, technology, management and other factors of production is gradually formed. A system of global production are gradually established. The fierce competition of price and quality lead companies to focus on their core business, and integrate internal and external resources in the global scope to achieve efficient use of resources. The core enterprise in supply chain system must cooperate with other members through effective coordination mechanism to improve the efficiency of supply chain. Decathlon is an international manufacturer and retailer, it faces problems such as global expansion and production outsourcing. It is important for enterprises and suppliers to carry out quality control cooperation on the internationalization.In this paper, we consider a two-level supply chain consisting of a manufacturer and a supplier. The manufacturer focus on R & D and design, outsourcing production to suppliers to reduce the cost through collaborative production mode. Faced with the quality control problem of local suppliers, manufacturers share the cost of quality input and the profit. The demand is affected by the quality and price. A joint decision model of quality investment and product pricing is established.We study on the decision-making of manufacturer and supplier using game theory and optimization theory, In the Stackelberg game, the manufacturer work as leader, we decide the quality, price, profit sharing ratio, wholesale price and quality cost sharing proportion. Research shows that the quality and the price elasticity coefficient has an important effect on the centralized and decentralized supply chain quality and pricing decision. The proportion of quality investment plays an important role in decision making, pricing and profit sharing. Bargaining power plays an important role in quality cost sharing ratio, quality decision making, pricing and wholesale price decision. Through the comparison and numerical analysis, we verify the influence of different parameters on supply chain decision making and the profit of manufacturer and supplier.The research can enrich the cooperation theory of supply chain members under the condition of production outsourcing. We not only provide solutions to the price and quality decision making of supply chain, but also provide strategic support to supply chain members, which is of theoretical value and practical value.