Model Based On Revenue Sharing Contract In Supply Chain Coordination

Being one of the most important coordination mechanisms for supply chain, revenue sharing contract has been being always focused on by academia and firms. Observing today's complex marketing setting, many factors impact the decision behaviors of supply chain actors. This paper has reviewed many literatures about supply chain contracts and chose price-dependent demand setting, effort-dependent demand setting and decision bias setting to design and analyze the revenue sharing contract model. The key problem is supply chain coordination by revenue sharing contract. In particularly, the contributions are as following:(1) Revenue sharing contract with price-dependent demand. The retail price is specified as a decision variable. The coordination question for four-level supply chain with a material supplier, a manufacturer, a distributor and a retailer is discussed. It is verified that wholesale price contract in marketing setting can't coordinate four-level supply chain. Coordination by revenue sharing contract is analyzed and model optimal is given. The result shows that revenue sharing contract can achieve for-level supply chain coordination and Pareto Optimal. Furthermore, the retail price has no impact on the coordination.(2) Revenue sharing contract with effort-dependent demand. Through studying the effort's impact on revenue sharing contract, it is shown that a single revenue sharing contract fail to coordinate supply chain in this setting. A revenue and effort sharing contract model is designed to solve the problem and model optimal is also given. The result shows that the revenue and effort sharing contract can achieve Pareto Optimal and its performance is better than the wholesale price contract and the revenue sharing contract.(3) Revenue sharing contract with the retailer's loss-averse preference. By incorporating Loss-Averse Theory, a revenue sharing contract model is set up. How the loss-averse level impacts the contract parameters and performances is discussed. The result shows that supply chain coordination and win-win outcome are achieved by revenue sharing contract. Furthermore, the optimal wholesale price and the percentage of revenue have the oppositely changed tendency with the increase of loss-averse level. So do the retailer's expected profits and expected utilities and the supplier's expected profits.