| As the supply chain is composed of a number of enterprises, there are some conflicts at interest distribution and risk exposure. The business interest of the supply chain members is often not consistent with the total supply chain system. These lead to the supply chain double marginalization to reduce the overall supply chain profit and the individual members profit. Coordination between members of the supply chain is the core issue of supply chain management. The choice of the supply chain coordination mechanisms becomes the key problem. Transfer mechanisms can be broken down into principal-agent mechanisms, price coordination mechanisms, contract coordination mechanisms and inventory control mechanisms. Supply chain contract coordination is a widely used supply chain coordination mechanism.Option is introduced into the supply chain collaborative process by Supply chain option contract. It can effectively improve the performance of supply-chain collaboration. In the practical application of the supply chain option contract on the entire supply chain optimization role in the coordination system has been fully manifested. And theoretically the optimization capability of option contract has been quantitatively verified (Barnes, 2002). Domestic and foreign scholars have done a large number of researches on the supply chain option contract. These researches deepened the usage of option in the supply chain coordination mechanism and expand our views of supply chain option contract(Feng etc.(2003),Wu and Kleindorfer(2005),Guoqiong and Yandel(i2006),Wang and Liu(2007),Milner and Kouvelis(2007),Wu, Kleindorfer and Zhang(2002),Wang and Michel(2004)). But through the author's research we can found that previous researches only take few factors into account including the cost of products, prices and the relationship between enterprises. But the option contract involved the amount of funds used cost, the opportunity cost of scheduled capacity and the uncertainty risk of the price fluctuations. If these factors are not considered, this supply chain option contract is clearly not enough sound. In this paper the author's main task is to introduce market interest rates, the price volatility and option deadline into supply chain option contract model to construct more suitable model for modern industrial economy. Meanwhile the new model provides B-S Model(Black and Scholes,1973)optimal function and only one solution.Based on this model, this research focuses on solving the following problems:(1) The traditional supply chain option contract has been calculated on the coordination of the supply chain optimization strategy, and formed a relatively stable supply chain option contract model. How to introduce market interest rates, the price volatility and option deadline into the traditional model is a hard work. It needs in-depth study of the original model and the expansion of transformation. (2) When increasing in market interest rates, the price volatility and option deadline for the three factors, the supply chain can also achieve coordination optimization or not, this needs in-depth model derivation and computation. (3) The traditional supply chain optimization option contract has many results. This can not provides direct reference for enterprises. Market interest rates, price volatility and option deadline for the introduction of supply chain option contract model. Whether we can achieve supply chain optimization option contract or the outcome of the further convergence formed only one solution? (4) For supplier-led and retailer-led supply chain as two different types of supply chain structure. The introduction of market interest rates, the price volatility and option deadline, supply chain optimization process and the coordination of results have similarities and differences? (5) When product prices are impacted by the market economic situation, how to achieve coordination of the supply chain optimization including market interest rate, price volatility and option deadline?The main research work and conclusions include the following:(1) Construction decision-making model of the supplier-led supply chain mechanism by introducing market interest rates, price volatility and option deadline. The introduction of market interest rates, price volatility and option deadline affects the traditional supply chain model with option contract. It is a further restriction on option pricing. The option price is the decision-making variables of supplier. This model has the only form of coordination optimization solution. Retailer's order of the options is the regulated variable. Supplier uses options prices portfolio to adjust retailer's ordering volume, and guides retailer to achieve overall supply chain optimal ordering. The interest rates impact on the option pricing: when interest rates increase the market pricing curve mobiles to the right and upward mobility, optimal option pricing from supplier coordination points mobile to the lower right pricing optimization along the curve. When the other conditions remain unchanged, the market interest rate increase, vendors tend to develop a lower option prices and a higher option exercise price. Price volatility impacts the option pricing: price volatility would cause the rotation of options pricing curves. There is a complicated relationship between price volatility and the rotation. The option-pricing curve swings around coordination point. The above conclusion of the study can help suppliers-led enterprises in the supply chain make scientific decision and improve operational performance of the supply chain and achieve the coordination of the supply chain optimization. Author uses Matlab software for producing market-leading program of supply chain decision-making process, the program can help suppliers calculate their optimal combination of option pricing, and help retailers calculate optimal ordering volumes.(2) Construction decision-making model of the retailer-led supply chain mechanism by introducing market interest rates, price volatility and option deadline. Retailers in Retailer-Led supply chain have more decision-making variables, including options prices, the options exercise price, and procurement volume. The supplier makes decision only on it's yield. Supplier's production volume is the regulated variables. The downstream enterprise encourages supplier to achieve the required output through options price. Ensuring that the products of downstream enterprises for production and supply arrangements forms the opportunity cost to supplier, and the payment for option is downstream enterprise's compensation; In the retailer-led supply chain, option pricing must follow the rules of the market pricing. Options market pricing rules and supply chain optimization mechanisms combined profits can derived option pricing to achieve the overall increase in profit optimization solution. And it is the only solution; Retailer-led coordination solutions of the supply chain optimization achieve a balanced supply chain optimization of the total profits, but also in a dominant position distribute the downstream enterprises more profits. This model also explained the analysis of retail giant electronic products (such as Gome and Suning etc.) industry position and profitability. The interest rates impact on the option pricing: When market interest rates fall the pricing curve mobiles to the left and downward movement, and causes optimal option pricing points move to the top left along the downstream enterprises coordinate pricing curve, the option prices rise, at the same time the exercise price lowering. Retailers tend to a higher option price and a lower exercise price. Price volatility impacts the option pricing: fluctuations will cause the rotation of option pricing curve. With the decline in the volatility, the option-pricing curve rotates clockwise. Option prices rise, and the exercise price lowering. Author uses Matlab software for producing a leading program of supply chain decision-making process, the program can help suppliers calculate their optimal production volume, and help retailers calculate the combination of option pricing and optimal ordering volumes.(3) In the comparative analysis of above two cases: in retailer-led supply chain downstream enterprise's profits is higher than the supplier-led supply chain. This further validates the role of the supply chain dominance. The total profit of retailer-led supply chain is lower than the total profit of supplier-led supply chain, mainly because that retailer uses the dominance to incentive suppliers increasing production. This would increase the risk of vendors. Suppliers have to face shortage cost or surplus products residuals processing.(4) Construction of the decision-making model of supply chain mechanism in B2B electronic market by introducing market interest rates, price volatility and option deadline. And Author analyzes the model using of supply chain optimization mechanisms. B2B electronic market has an important influence on the contract of the supply chain. As electronic market presence, the spot market price of the electronic market economy status impacts the supply chain contract. So the option pricing and the option's role on procurement should be fully considered. Procurement volume of retailers is the regulated variables in supply chain optimization. The option pricing directly regulates the volume of procurement options. It can be achieved through the supply chain profit optimization model and there is only one solution exists. Interest rates impact on the option pricing: declining market interest rates cause market-oriented pricing curve move to the left and downward, and the movement causes optimal option pricing points move along the downstream enterprises coordinate pricing curve to the top left. Option prices rise while the option's exercise price reduces. That is, when market interest rates fall, the supplier preferred provider a higher option price and a lower exercise price. Price volatility impacts the option pricing: fluctuations will cause the rotation of option pricing curve. With the decline in the volatility, the option-pricing curve rotates clockwise. Option prices rise, and the exercise price lowering. Author uses Matlab software for producing a leading program of supply chain decision-making process, the program can help suppliers calculate their optimal production volume, and help retailers calculate the combination of option pricing and optimal ordering volumes.The innovations of this study are the following four points:(1) This study introduces market interest rates, the price volatility and option deadline to the supplier-led supply chain, and successfully constructs vendor-oriented supply chain options contracts model based on the option pricing. Retailer's ordering of the options is the regulated variable. Through the analysis of the model, the coordinated optimal solution was found. And a sensitivity analysis is done with relevant parameters.(2) Construction of the decision-making model of the retailer-led supply chain mechanism by introducing market interest rates, price volatility and option deadline. Supplier's production volume is the regulatec variables. In the retailer-led supply chain, option pricing must follow the rules of the market pricing. Retailer-led coordination solutions of the supply chain optimization achieve a balanced supply chain optimization of the total profits. This model also explained the analysis of retail giant electronic products (such as Gome and Suning etc.) industry position and profitability.(3)Construction decision-making model of supply chain mechanism in B2B electronic market by introducing market interest rates, price volatility and option deadline. And Author analyzes the model using of supply chain optimization mechanisms. B2B electronic market has an important influence on the contract of the supply chain. As electronic market presence, the spot market price of the electronic market economy status impacts the supply chain contract. So the option pricing and the role of options on procurement should be fully considered. Procurement volume of retailers is the regulated variable in supply chain optimization. The option pricing directly regulates the volume of options procurement. It can be achieved through the supply chain profit optimization model and there is only one solution exists.(4) By introducing market interest rates, price volatility and option deadline, this study constructs three kinds of model for supplier-led supply chain, retailer-led supply chain and supply chain with B2B electronic market. Author uses Matlab software for producing a leading program of supply chain decision-making process. The program can help suppliers calculate the decision variables for both suppliers and retailers. |
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