Supply Chain Coordination With Contracts Under Uncertainty Demand

Based on contract theory, principal-agent theory, game theory, and normative methods, aiming at the single-product supply chain consisting of one supplier and one retailer the paper makes systematic research on supply chain coordination with contracts under uncertainty demand.Firstly, the paper systematically describes supply chain contracts, Then, it reviews the current theoretical research on four classical contracts, and makes specific analysis on supply chain coordination with contracts under sales-promotion, capacity restraints and asymmetric demand information.Secondly, based on hypothesis of newsvendor problem, by including such factors as residual, stock-out loss and retailer's costs, the paper analysis the applicability of the four classical contracts (Wholesale-price contracts, Buy-back contracts, Revenue sharing contracts and the quantity flexibility contracts). Then, the paper points out some problems during the execution of the Whole-sale price contract and the Buy-back contract, further makes suggestions for improvement, and summarizes the characteristic of the Revenue sharing contract and the quantity flexibility contract.Thirdly, this paper introduces the impact of retailer's sales-promotion into supply chain, analysis the applicability of four classical contracts, point out the different effects of these contracts. By analysis, we find a new problem in incentive: the retailer bears the whole sales promotion cost, both of the supplier's and the retailer's benefits. To solve the problem, the paper designs contracts under two situations: 1) Under the situation that not only the sales -promotion level can be observed, but also the cost fee can be determined, the paper designs the buy-back plus allowance of cost contract. 2) Under the situation that the sales-promotion level can be observed, but the cost fee can not be determined, the paper designs the buy-back plus allowance and punishment of the sale quantity contract.Fourthly, the paper discusses the supply chain coordination with contracts under capacity restraints and asymmetric demand information,on one hand, for the supply chain under symmetric demand information, the paper analysis the applicability of the option price contract and the whole-sale price contract, and by analysis we find that the optimal capacity departures from the optimal capacity in the supply chain because no restriction is laid on the suppliers at the first stage of game. To solve the problem, the paper designs the option price plus bonus contract based on the option price contract. On the other hand, for the supply chain under asymmetric demand information, based on the option price plus bonus contract, the paper adds contract parameters based on high type retailer's behavior: 1) when the executive price reaches proper level , information sharing can be achieved but the optimal in the supply chain cannot be achieved. 2) when the proper promise fee is paid, both information sharing and the supply chain optimal can be achieved. Finally, the paper summarizes the contents, and points out the further directions of research on supply chain coordination with contracts.