Study On FMCG Supply Chain Coordination

The fast moving consumer goods(FMCG) industry is undergoing deep changes.FMCG manufacturers and retailers have much closer contact than before and large retailers play a more and more important role in the supply chain.The traditional manufacturer-leading supply chain is converted to retailer-leading gradually.Even both the large retailers and manufacturers are the members in the supply chain but they have their own targets.That is why there are channel conflicts which would cause negative effects.Contracts mechanism is one of the best ways to help reduce channel conflicts.This paper firstly gives qualitative analysis to explain why FMCG manufacturers and large retailers would unite.Then it gives quantitative analysis to explain it.Fast moving goods are divided into perishable goods and non- perishable goods.Accordingly a retailer-leading buy back contract and a retailer-leading revenue-sharing contract are built.Finally numerical examples are carried out to illustrate the application of the contracts could achieve supply chain coordination.Entrance fee and retail gross profits are introduced as two new parameters in the retailer-leading revenue-sharing contract model and numerical example is carried out to illustrate the model is excellent.Besides,the function is built to explain the relationship between trade price and retail gross profit and it's used in the retailer-leading buy back model.Finally numerical examples are carried out to illustrate the model could help both the manufacturers and large retailers gain more profits.