Supply Chain Channel Coordination With Revenue Sharing Contract

With the intense external market competition and the highlight the defects of traditional channels, supply chain channel model as a new channel was gradually recognized by the industry insiders. However, due to supply chain channel system was composed of decentralized organizations from relatively many independent enterprises through alliances or partnerships. When the various channels members pursued their own maximum interests, it would often overlook the interests of the other alliance members. This was the so-called "double marginalization." On the other hand, in the supply chain research field, revenue sharing contract as a coordination form has been gradually risen great concern by the researchers. In the management practice, Blocbuster companies and Amazon applied revenue sharing contract to their business and made their market share increase significantly and the performance of suppliers and retailers improve greatly. Therefore, the paper tried to introduce revenue sharing contract into the supply chain channel coordination. And for this new field, we need to discuss some new problems that we face, such as how the revenue sharing contract produce balanced and coordinated mechanisms to the supply chain channel, how to set acceptable wholesale price, the optimal order quantity and how to determine the distribution of income ratio to both sides by coordination. And how to evaluate the effect of the supply chain channel coordination based on revenue sharing contract.There are5main components of the paper. The first part of the paper tries to form the theoretical basis and research framework. Then the following parts closely around to discuss the three parameters (price, order quantity and income distribution factor) of supply chain channel coordination based on the revenue sharing contract. The fifth part will give an evaluation to the supply chain channel coordination based on revenue sharing contract. The contents of the main parts of the paper are as follows:The first part of the paper has carded out the previous literature of the revenue sharing contract and the supply chain channel coordination. The thesis thought that the formation of revenue sharing contract is motivated by the intense competition of external market environment of and increased consumer sovereignty. And the internal reason is the objective conflict because of and "double marginalization" effect. From the basic model of revenue sharing contract, we reveal it reconstructs the relationship with the supply chain channel members and its equilibrium mechanism to the supply chain channel. And we draw the conclusion that revenue sharing contract is a balance mechanism to the supply chain channel coordination.In the price coordination part, by academic analysis we thought the objective of wholesale price coordination was maximizing the overall benefits of the whole supply chain and the purpose was to increase the chain competition. By the use of Cobweb theory, we construct a price shocks system between the suppliers and the retailers. From the model we find it can create a mutually acceptable wholesale price between the equilibrium. in the coordination model of wholesale prices and income distribution, wholesale price subsidies for unsold products. We draw conclusion that the supply of revenue sharing contract chain channel can select the appropriate which combination of wholesale price and revenue between sharing factor, which can realize the reasonable revenue distribution between the supplier and the retailer while at the same time it can make the supply chain channel coordination. Assuming that the retailer demand function was the multiplier mode and the demand of the products in the market is elastic, by comparing with the wholesale price contract, we obtained feasible extent of the wholesale price.For the product order coordination, we introduce the revenue sharing contract to the newsboy model. We considered elements of demand distribution and time when ordering the product. In considering the demand distribution, the constructed marginal revenue model show that demand for both continuous and uniform distribution or exponential demand distribution, the standard deviation and demand expectation both are with a negative correlation with supply chain revenue. And the orders amount with revenue sharing contract is larger than without revenue sharing contract, the revenue of the supplier retailer and the whole supply chain is more them without revenue sharing contract If the time factor to order coordination is considered, the larger the forecast mean market demand, the more onward of the order point will be. The more accuracy for the forecast market demand, the more backward of the order point will be. The simulation result further supports the conclusions of the model.In the coordination of the revenue distribution, we summed up the five factors of information sharing, risk commitment, effort level, resources input and contribution which impact revenue distribution. And by using of mathematical models we demonstrated and the former3factors were. With cooperative game model we analyzed bargaining process of the revenue distribution e, and draw the conclusion that during the revenue distribution of the negotiation process to make full use of its own preemptive advantage is much more important. Owing to existence of revenue distribution conflict, we put forward the TOPSIS method combined with the Euclidean distance income distribution, and by this way we provided a new idea to solve the conflict. In the revenue distribution incentive, through content analysis of relevant literature refining the concept of the theme and abstracting out specific discriminating factors of revenue sharing, and then create an incentive framework and put motivating factors into the revenue distribution. We thought it will better reflect fair and reasonable principles when distributing the gained revenue.For the coordination evaluation of supply chain channel based on revenue sharing contract, on the basis of the problem of the revenue sharing contract in supply chain coordination with the main problems the process, combined with cross section of revenue sharing contract and the evaluation of the supply chain channel, we separated out cost, efficiency and satisfaction as evaluation perspective, and build a theoretical model of evaluation. Accordingly, from the cost, efficiency, satisfaction we established10secondary indicators,43sub-indicators and quantitative calculation for some indicators are given in this part. With GAHP method and third-party evaluation mechanism, and with the help of yaahp0.52software, we calculated out the results and found that they coincided with the previous theoretical conclusions.Through the above research, we hope to do innovative and contributive work in the following areas. Based on the proven models of revenue sharing contract based on, we applied it to the supply.chain channel coordination, which involves research ideas and research design would provide reference for this new field. To discuss on the three parameters in revenue sharing contract was attempting to explore further study to this field. In the revenue distribution coordination, putting the extracted discriminative factor distribution elements to the distribution model would be a new-revenue distribution and incentive mechanism. We also established a new evaluation prospective and index system for the supply chain channel coordination based the revenue sharing contract. The purpose was to try to avoid possible problems in applying supply chain channel coordination tried to achieve the coordination goals and provide a theoretical reference for the management practice. Through case studies and simulation tried to apply the channel coordination model into practice as far as possible and to reflect the value of theoretical research as much as possible.