Consider Ordering Two In Advance Of Impact Of Supply Chain Contracts

With the quick development of technology and increasingly fierce competition, product life cycles have been shortened gradually and time has become the key factor affecting the product demand and cost. Especially for the high-tech products, demand has the prominent nature of time-sensitive. Market competition based on cost for priority has been changed to competition based on time. Quick responsiveness of a supply chain has been accepted as a key to success, which is determined by the lead time between stages. The core idea of quick response of is to shorten the lead time.The practice of supply chain operations shows that not all suppliers obtain benefits in lead time reduction. The retailers deciding order quantity are based on the market forecast. The larger variance of the forecasted demand results from forecasting the demand earlier. So the retailer want to order later so as to reduce the risk of high uncertainty. If the retailers'ordering lead time is very short, the risk of demand uncertainty risk has transfer to the suppliers, which make the suppliers'cost increase, including fixed assets investment and unbalanced production capacity cost. Therefore, from the suppliers' perspective, they hope the retailers order earlier which means a long ordering lead time. How should the suppliers set contract terms to coordinate the contradiction between the retailers and suppliers on ordering lead time? This makes great realistic significance and theoretical significance in improving the competitiveness of the supply chain.In this paper, we assume that the wholesale price, forecast accuracy and manufacturing cost are changing with different ordering lead time. We make a research on that whether the two traditional contracts can coordinate the supply chain under new conditions. Main content of the paper are as follows:1. Reviews on the traditional supply chain buy back contract and revenue sharing contract. They can coordinate the supply chain and allocate the profits arbitrarily between the two parties. The key parameters affecting the profit allocation is discussed.2. Research on the supply chain buy back contract with consideration of influence of ordering lead time. The result shows that the buy back contract can't coordinate the supply chain under new environment. The simulation result shows that the retailers'profit increases while the suppliers'profit decreases when shortening the ordering lead time, which means only the retailer benefit from the ordering lead time reduction. We analyze the changing parameters of the supplier's wholesale price, the buy back price, inventory cost and lost sales how to affect the retailers'optimal order quantity and profit.3. Research on the supply chain revenue sharing contract with consideration of influence of ordering lead time. The result shows that the revenue sharing contract can coordinate the supply chain under new environment and the pricing principles for the suppliers are presented, where the retailers'optimal decisions are consistent with the supply chain's optimal decisions. The simulation results show that shortening ordering lead time can improve the entire supply chain profits. We analyze the changing parameters of the salvage value, inventory cost, lost sales, the mean of the market demand and the ordering lead time how to affect the supply chain's optimal order quantity and profit.