Research On Supply Chain Coordination Based On Fairness Preference Under Promotional Efforts

With the fierce competition in the market economy,the production cost of goods has increased substantially,and the homogenization and diversification of commodities have increased the difficulty of sales,making goods more dependent on promotional activities to increase sales,and gain a certain market competitiveness and visibility.At the same time,with the increase of cost,the upstream and downstream enterprises in the supply chain pay more attention to the fairness of the distribution of benefits.The fairness preference behavior of enterprises has increased the difficulty of cooperation among members of the supply chain,and because the promotion activities affect the supply chain operation,reasonable coordination of the supply chain is more necessary.Behavioral factors have received attention in the study of supply chains for its mighty explaining ability,but the literature has a lack of research on supply chain coordination that considers fairness preference behavioral factors based on business factors such as promotions.Therefore,in the supply chain where retailers have promotional efforts and market demand is affected by promotion,the FS model is used to discuss the impact of retailer fairness preferences on promotion efforts and optimal ordering decisions.Then,under the framework of Newsvendor,the coordination mechanism of buyback and promotion cost sharing contract and revenue sharing and promotion cost sharing contract is designed.Based on the profit function of the retailer taking the promotion,this paper introduces the fairness preference to establish the F-S utility function model.First,according to the retailer's fair utility optimization,we respectively obtain the decisions of the optimal ordering and promotion effort level under disadvantageous unfair preference and advantageous unfair preference,and we investigate how fairness preference concerns affect supply chain decisions.It turns out that the order quantity and the level of promotion effort decrease with the increase of the degree of disadvantageous unfair preference and increase with the degree of advantageous unfair preference.Secondly,because of the good coordination and consistency of the buyback contract and the revenue sharing contract in the traditional supply chain,this paper combines the decision under the retailer's fair preference with the decision-making of the supply chain to separately construct the buyback and revenue sharing contract introducing the promotion cost sharing,the coordination conditions and equivalence relations between the two contracts are discussed.Finally,an example verifies the conclusions of the relevant decision conclusions and the feasibility and effectiveness of the contract through numerical analysis.And summarize some management implications.