Research On Supply Chain Coordination Based On Trade Credit Under Demands Effected By Sales Effort Level

With the development of science and technology and the advent of the information age,product life cycle becomes shorter and shorter,especially in fashion,electronics and software industries.These short-life-cycle products have the characteristics of demand uncertainty and short sales cycle,and it is very important for enterprises to improve their market demand.However,that the retailer do some sales effort activities can expand greater the terminal demand in the shorter sales cycle.Doing sales effort activities is beneficial for the supplier,but the retailer need pay all the cost of effort,so there is a conflict between the supplier and the retailer,and the supply chain will be in an imbalance state.Therefore,trade credit as an incentive and coordination mechanism,for the supplier,it can encourage the retailer to order more products,thereby expanding the sales of product and increasing the supplier's benefit;for the retailer,it can reduce their capital occupation,thereby obtaining the corresponding investment income.So to a certain extent,trade credit can optimize the supply chain,and reduce the "double marginalization" of the supply chain.Based on the operation situation of A enterprise,this paper uses the method of combining theoretical research and practical application to study the coordination problem of the supply chain of short life cycle product,when the demand is effected by sales effort.This paper adopts trade credit as the basic supply chain contract means,and then combines with quantity discount contract to expand in-depth study on supply chain of coordination issues,mainly as follows:This paper describes the background of A enterprise and its supply chain,analyzes the operation problems of A enterprise.The investigation found that: The overall performance of supply chain to which A enterprise belongs is not high,and the supply chain lacks certain competitiveness compared with other supply chain,that is,the market share of products is very small.This paper studies the problem of optimal decision-making based on trade credit under the demand effected by sales effort level.Firstly,the coordination effect of trade credit on supply chain under the stochastic market demand is analyzed.Secondly,the trade credit model which considers the retailer's sales effort is built respectively under decentralized decision mode and centralized decision mode,and gets the operation decision and the optimal expected return of the supply chain's members and system.Then the impact of sales effort level on the order quantity and expected return is analyzed,and the influence of the trade credit period on the optimal decision and the optimal expected return is discussed.And then the coordination effect of trade credit on the supply chain when the demand is affected by sales effort level is analyzed.The results show that: in the general stochastic market demand,trade credit can't achieve the coordination of supply chain.However,when considering the retailer's sales effort,trade credit can achieve Pareto improvement to the supply chain,but still can't coordinate the supply chain.Moreover,when the demand is effected by sales effort level,sales effort level have a positive effect on the order quantity and expected return of the supply chain's members and the system;and trade credit period is positively related to the optimal decision and the optimal expected return of the retailer and the system,but is negatively related to the expected return of the supplier.Finally,the above conclusions are applied to A enterprise,on the one hand,the above conclusions are verified,on the other hand,the optimization strategy of the operation of A enterprise's supply chain is put forward.This paper studies the design of quantity discount coordination mechanism based on trade credit under demand effected by sales effort.Firstly,the quantity discount based on trade credit model which considers the retailer's sales effort is built respectively under decentralized decision mode and centralized decision mode,and gets the operation decision of the supply chain's members and system.Secondly,the incentive effect of quantity discount contract based on trade credit for the retailer is analyzed.Then,this paper analyzes the coordination of the contract,and discusses how to carry out the reasonable income distribution.The results show that: the quantity discount ratio can negatively affect the retailer's optimal decision.And when the contract parameters satisfy certain conditions,namely that quantity discount ratio and trade credit period satisfy certain relation and income distribution ratio satisfies a certain range,the contract can realize the perfect coordination of the supply chain and achieve a win-win situation in both supply chain's members.Finally,this paper applies these theoretical studies to A enterprise,and puts forward some useful recommendations to improve the income situation of enterprises in the supply chain and achieve the supply chain coordination.