A Study On Supply Chain Game And Contracts Based On Demand Disruptions

In recent years, with the rapid development of social economy, the competition among enterprises becomes increasingly global segmented and severe. The competition among the enterprises is not just between individual enterprises, but also the whole supply chain. Enterprise managers on a supply chain can not only focus on its own development, but also the operational efficiency of the supply chain. A strategy which can guarantee the supply chain operate in an effective way and respond to the change of the external market environment. Therefore, how to reduce a company’s operation risk and how to coordinate a supply chain become a primary task on supply chain management. As one of the most important tools on supply chain management, contracts can make clear responsibilities between supply chain agents, balance their revenue distribution and finally realize their cooperation to improve their own profits. Due to the business market becomes complex, products update faster, consumer preference changes dynamically and supply chain disruptions occur frequently, all these will bring the supply chain more businesses risks. How to effectively coordinate such risks to keep the supply chain’s coordination and guarantee the chain’s revenue will be main problems on supply chain management and which also caused extensive concern of the academic. Above on, this paper focus on a supply chain which produce short-term-life products and we will study how such a supply chain achieves coordination when demand variations occur. Based on theories of game theory, microeconomic theory and supply chain coordination management, we finish our study by establishing mathematic model and we provide supply chain managers some valuable strategies to deal with the risk of demand variations.The remainder of this paper is structured as follows:The first chapter summarizes the background and significance of this thesis, as well as describes the research objective, content and method.The second chapter summarizes the current research status of supply chain coordination management and reviews literature related to this thesis.The third chapter studies the traditional supply chain management issues while considering the single-manufacturer and single retailer supply chain and we assume a linear relationship between its market demand and retail price, then based on this we investigate how the changing of fashion trends can affect the market demand and the coordination scheme of a supply chain.The fourth chapter inserts the agent’s behavior of "inequity aversion" into supply chain coordination, and we study how such a behavior affect the constant wholesale price, linear quantity discount policy and revenue sharing contract which are wildly used on the research of supply chain coordination management.The fifth chapter studies the retailer’s behavior of inequity aversion under the newsvendor scenario and we propose a loss sharing contract to coordination the supply chain.The sixth chapter investigates the influences of forecasting bias to the supply chain coordination and we propose a new contract, loss-profit sharing contract, to coordinate the supply chain. Finally, we find that our new contract is more general in achieving coordination and more flexible than the revenue sharing contract for the manufacturer in decision making, although the two types of contracts are equal under certain conditions.The last seventh chapter summarizes the main contents of this thesis. By indicating the deficiencies existing in the thesis, the future research directions are illustrated.Innovations and contributions of this thesis are briefly summarized as follows:(1) We extend and complement the tradition supply chain coordination manage-ment by considering the effects of consumer preference and agent behavior to the supply chain.(2) Under certain conditions, we improve the applicability of the traditional well known contracts, revenue sharing contract and linearly quantity discount policy, and provide our new contracts to coordinate the supply chain when the above three contracts fail.(3) We investigate the influences of agent’s behavior of inequity aversion on supply chain coordination under the newsvendor scenario, and we provide our new contract which can work on this scenario.(4) We introduce the product quality into the supply chain coordination and investigate its influences on supply chain decision-making under different scenarios.