Profit Allocation Coordination Mechanism Of BTO Supply Chain Based On Option Contract

Due to the change of market demand and the diversity of customer demand, theenterprise production model have changed from making to stock (MTS) to building to order(BTO) gradually. with the wide application of BTO, how to accurately predict the needs ofshort life cycle products and reasonably allocate the benefits of supply chain has become themain problems of the enterprise to be solved at present. However the profit allocation is oneof the key problems of profit allocation coordination mechanism. When in the face ofuncertain order which from the enterprise internal and external, the enterprise uses areasonable profit allocation coordination mechanism which can work out the optimal orderproduction strategy. On the basis of satisfying the established service level, quickly responseto the demand of the market, so as to obtain the maximum benefit. Therefore, the study ofprofit allocation coordination mechanism of BTO supply chain can not only improve thewhole performance of the supply chain, but also can ensure the supply chain in the long-termstable operation condition.This paper’s logical lines is that the review of literature which to the profit allocationcoordination mechanism of supply chain-theoretical basis-the basic model of supply chainoption contract-the demand of the influence of effort degree about the option contractmodel-the demand of the influence of effort degree about the double contract model-empirical research, integrated application of modern profit allocation coordinationmechanism theory, computer and math theory, the systematic study of the profit allocationcoordination mechanism of supply chain is gived from the point of view of supply chaincontract. Thesis describes the research background and significance of the BTO supply chainprofit distribution coordination mechanism; supply chain profit distribution coordinationmechanism research status at home and abroad was summarized and analyzed in paper; onthe basis of the BTO supply chain definition discussed the characteristics and significancesof the BTO supply chain profit distribution, and the importance of the main factors affectprofit distribution; at the same time, the supply chain contract definition, classification andcharacteristics were researched; the paper from the retailer’s effort degree whether influentsthe random demand, researched problems of the two single-cycle the BTO supply chain profit distribution coordination mechanism of a single manufacturer and retaile when theeffort degree do not affect demand, using option contract can realize the supply chaincoordination; when the effort degree affects demand, using contract mechanism which willconvert multivariate decision problem to univariate decision problem; then in a singledecision variable, based on the cost sharing,option contract mechanism which can realizethe supply chain coordination is proposed; when the effort degree affects demand, usingdouble contract mechanism which will convert multivariate decision problem to univariatedecision problem. At the same time in a single decision variable, based on cost sharing,double contract mechanism which can realize supply chain coordination is proposed; finallythe option contract model and the double contract model were calculated and analysed.