Research On Revenue Sharing Contract Based On Signaling

Supply chain management is a current hot issue,the core of which is to deal with the adverse impact of demand uncertainty on the supply side through specific strategies.Supply chain contracts are important means and mechanisms for supply chain coordination and global optimization,including wholesale price contract,buyback contract,revenue sharing contract,quantity flexibility contract,etc.Among them,revenue sharing contract is widely used because of its flexibility in management practices.Revenue sharing contract is used to coordinate suppliers and retailers through different combinations of wholesale price and revenue sharing rate.Different combinations represent different levels of market risk sharing and benefit splitting,and the reduction in supplier revenue caused by lower wholesale prices is compensated by a higher revenue sharing ratio.The rate of revenue sharing is a key variable,which can signal market demand and decision preference under certain circumstances.In this context,this paper studies the signal value of revenue sharing contract parameters in order to reveal the informative role of revenue sharing contract in supply chain channel management practice.The paper mainly discusses two aspects: the first is the question of how the supplier judges the type of retailer through the signal of the contract parameters when the retailer has the risk of fulfilling the promise of revenue sharing at the end of the sales season,and this is especially true in supply chains where there are small or less trusted retailers.The second is the question of how suppliers can judge the market demand potential of retailers’ products through the signals transmitted by the revenue sharing contract parameters in the case of information asymmetry.Based on the signal transmission model,this paper establishes a revenue sharing contract model with information symmetry and information asymmetry,which has the risk of revenue sharing fulfillment or the uncertainty of product demand potential.This paper discusses the combination of contractual parameters when the supplier does not know the reliability of the retailer’s revenue sharing commitment or the likelihood of high or low market demand for the product,and the signaling effect of wholesale price and revenue sharing rate is shown by ordering decision and profit results under the uncertainty of revenue sharing risk and demand potential.The study found that:(1)Higher wholesale price and revenue sharing rate can indicate lower revenue sharing risk and higher product demand potential;(2)Signaling of revenue sharing rate is more efficient than wholesale price,because signaling only through revenue sharing rate is closer to profit under the most efficient separation than signaling through wholesale price alone.Finally,the numerical analysis of the model parameters is carried out to verify the validity of the research conclusions.