Coordination In A Supply Chain Dominated By The Retailer Under VMCI

Large retailers can instruct manufacturers' production and suppliers' operations instead of simply accepting the product passively with well awareness and prevision of market demand under the economic form of the buyer's market.As the terminal of the supply chain,retailers can contact and communicate with consumers directly.The market demand can be improved through the level of retailers' sales effort,such as hiring more marketing staff,placing products on shelves of eye-catching position,increasing advertising investment and so on to improve the terminal market demand.Vendor-managed consignment inventory(Hereinafter referred to as VMCI)strategy is an innovation in the traditional inventory management model.VMCI refers to inventory operation mode combining VMI with consignment.Based on the above realistic background,this paper study on decision and coordination in a supply chain dominated by the retailer under VMCI by using Inventory Management Theory,Game Theory and Supply Chain Contract Theory,in order to design an appropriate coordination mechanism to achieve Pareto improvement in the supply chain system.The specific findings of the article are as follows:(1)Research on supply chain coordination with sales efforts affecting market demand under VMCI.The results show that the supply chain system can achieve perfect coordination with introducing revenue sharing contract and sales efforts cost sharing contract.System profits lean towards the retailer in the coordination model.(2)Research on supply chain coordination with the wholesale price decision right transferring to the retailer.The results show that parameters of revenue sharing contract and the sales efforts cost sharing contract have different effects on the decision variables and profits.The sharing contract between revenue sharing contract and sales efforts cost can realize Pareto improvement of supply chain system.(3)Research on supply chain coordination with the TPL service provider involving.The results show that the supply chain system can achieve perfect coordination with introducing revenue sharing contract and sales efforts cost sharing contract,while the TPL service provider's logistics price is lower than its logistics cost.(4)The results of system comparison and analysis show that comparing with the wholesale price determined by the supplier and endogenous,the retailer tends to choose wholesale price determined by himself to operate the supply chain under the decentralized decision-making model without contracts.Comparing with supply chain system without TPL service provider involving,the profits of retailer and supplier decrease in system with TPL service provider involving.It means both the retailer and the supplier will choose to operate the supply chain system without TPL involving.