Supply Chain Coordination Model With Effort Level Dependent Demand

Supply chain is a complex dynamic system, which not only contains suppliers andmanufacturers and others of the upstream supply chain members, but also hasdistributors and retailers of the downstream, etc. The most of supply chain membersonly pursue their own optimal interests alone, it is created "double marginalized effect"of supply chain. It means that the supply chain members’ own profit has achievedoptimal alone, but the system as a whole could be not reached. In order to avoid theoccurrence of this phenomenon, leaders need to make the right strategic decisions.Therefore, the research of supply chain coordination has become particularly important.Firstly, this thesis mainly describes the research background and meaning of supplychain coordination in introduction, which points out many problems in the supply chaincoordination. With the competing intensely, the manufacturer’s other efforts to pay forthe product market demand has a positive influence which contain advertisingcooperation, quality control, and after-sales service. In this thesis, it is studied themanufacture’s effort level in the model.Second, for the supply chain coordination model of both single retailer and twomanufacturers with effort level, this thesis considers the proportion of themanufacturers’ efforts cost for the retailers and its influence on product demanding,which gets the manufacturer’s optimal effort level and the optimal quantity of early salesunder centralized and decentralized decision-making. In addition, the thesis alsoanalyzes that the revenue sharing contract can be realized supply chain coordination,and gets the manufacturer’s optimal wholesale price.Finally, the model which combines fixed demand with the effort level andpunishment and reward contract is considered under the research background ofvolatility risk environment. It shows that the reward and punishment contract canachieve supply chain coordination, and discusses the changes of the supply chainmembers’ profit under the volatility risk, besides it gets some related sensitivity analysisand management implications by data simulation.