Contract Coordination Of Manufacturer Risk Avoidance Under Supply Interruption

Global sourcing practices promote the free flow between money and products,and makes the supply chain network is more complicated,according to the theory of bullwhip effect,when any problem of a node in the supply chain will make the downstream loss bigger,and quickly spread along the chain,finally brought significant risks to the supply chain,but in recent years due to the uncertain factors in the supply chain of more and more,Whether due to natural disasters,political influence,the significant public health events such as the increasing of the uncertain factors in the external environment,and the product quality and the shortage of capacity increasing uncertainty factors in the enterprise internal environment,led to supply disruption risk occurred frequency increasing,how to supply disruptions after response effectively,reduce the risk is a key problem for relevant enterprises.Supply chain coordination can improve social and economic benefits of enterprises.It is of great practical significance to study how to establish an efficient and coordinated supply chain under the premise of supply interruption.This paper studies the supply interruption risk of the main supplier,discusses how to ensure that manufacturers can still obtain expected profits in the face of supply interruption from the perspective of contract coordination,and provides reference for the government and related enterprises to carry out supply interruption risk management.In this paper,the comprehensive utilization methods of literature analysis,the Matlab simulation,based on the theory of risk management,supply chain contract coordination theory,considering a by the upstream parts supplier,backup two-level supply chain consisting of suppliers,and downstream products manufacturers,research in the case of the double source purchase,supply parts caused by emergency interruption or completely suspended,The effect of manufacturer’s contract coordination strategy and risk aversion attitude on profit.Firstly,the optimal decision and expected return of main supplier,backup supplier and manufacturer under normal condition,partial supply interruption and complete supply interruption are studied.Secondly,the manufacturer’s optimal contract coordination decision is analyzed,and the influence of manufacturer’s risk aversion on the overall optimal decision and coordination conditions of supply chain is analyzed based on CVa R measurement tool.The last,the above coordination mechanism is verified by numerical analysis.The research conclusions of this paper are as follows:(1)By differentiating partial interruption and complete interruption conditions,the centralized decision model and decentralized decision model are constructed respectively,and it is proved that there is a unique Nash equilibrium solution for manufacturer’s order quantity.Whether it is risk neutral or risk avoidance,the capacity recovery level of the main supplier is a strict increasing function of manufacturer’s order quantity.Main supplier improve the level of capacity recovery is conducive to supply chain performance(2)from the manufacturer and reserve capacity due to the simulation results between suppliers,manufacturers of capacity booking volume,there existed a turning point when the manufacturer’s capacity booking volume is lower than the critical value,the backup supplier profit is about the optimal capacity due to fine the monotone decreasing function of the remaining units.(3)According to the simulation results of the revenue-sharing + penalty contract between the manufacturer and the main supplier,the contract can not only promote the capacity recovery of the main supplier,Both major supplier and manufacturer pareto improvements have been achieved.Finally,an example is used to verify the specific range of the coordination parameters of the contract.(4)from the relevant simulation results of the risk aversion,the manufacturer’s risk preference will not change the coordination state contract,but will affect the coordination of contract parameter values,and with the increase of manufacturers risk level,manufacturers are retained revenue sharing coefficient is higher,The smaller the penalty coefficient for backup suppliers,the smaller the manufacturer’s optimal order quantity and the expected profit of each member of the supply chain.