Three-Level Supply Chain Coordination with Revenue-Sharing Contract and Rebate-Penalty Contract

Abstract

A supply chain is made up of independent entities having independent decision-making abilities, each intent on maximizing his benefits. The coordination of a three-level supply chain made up of one manufacturer, one distributor and one retailer is studied under the random demand. Firstly, the optimal order quantity is determined with the channel coordination of the supply chain; Secondly, the paper designs a combined contract (revenue-sharing contract & rebate-penalty contract, RS-RP contract) to coordinate the supply chain, namely, manufacturer offers distributor a revenue-sharing contract and distributor offers retailer a rebate-penalty contract. The paper validates that RS-RP contract can coordinate the three-level supply chain by choosing reasonable parameters. The reasonable choice of parameters can attain the win-win good among all business members, which will help to improve the decision-making capacity and competive ability of businesses involved in the supply chain, and the sizes of parameters in a reasonable range relate to the bargaining position of a business. Finally, the validity of the RS-RP contract is illustrated by a numerical example.

Three-Echelon Supply Chain Contractual Coordination with Loss-Averse Multiple Retailer Preference

“…According to the optimal pricing and the optimal ordering policy, optimal order quantity can be calculated under the decentralized SC system. By substituting the numerical values from Table 3 into equations (36) and (37), we calculated the SC optimal order quantity, and the result of optimal price combination value is (25,800). e expected profit of manufacturer, distributor, and retailers is illustrated, where, the number of retailers is certain and the RS contract coefficient combination is certain with the retailer's loss-averse level.…”

“…Based on the risksharing contract, the retailer's preference is equivalent between the two contracts; but for the distributor and the manufacturer, their preferences between the two contracts are positively related to their own profit share in the SC. More recently, Sang [25] presented the RS contract in a twostage SC between one manufacturer and one retailer based on the prospect theory. e models of centralized decisionmaking system and RS contract are built by the method of prospect theory, and their optimal policies are also analysed.…”

Coordinating Three-Level Supply Chain under Disruptions Using Revenue-Sharing Contract with Effort Dependent Demand

“…However, literatures [32][33][34] ignored the impact of emergencies on supply chain coordination. Although literatures [6,7,14,15] considered the antidisruption ability of revenue-sharing contract, they ignored the influences of effort in supply chain coordination. Literatures [22,23,29,30] take the effort into consideration, but they did not consider the supply chain coordination under the circumstance of emergencies.…”

“…Zhang and Chen [13] proposed the supplementary contract of unsold goods in the case of VMI. Cao and Lai [14] and Pang [15] studied revenue-sharing contract to respond to emergencies. And their assumptions are different from those of Yu et al [9].…”

Three-Level Supply Chain Coordination under Disruptions Based on Revenue-Sharing Contract with Price Dependent Demand

“…Hu and Wang [19] looked into the impacts on the three-level supply chain under disruptions and improved a price discount contract which promotes antidisruption. Pang [20] came up with an improved revenuesharing contract which is characterized by an antidisruption ability when faced with demand disruptions. Sun and Zou [21] demonstrated the buy-back contract to coordinate the three-level supply chain under disruptions.…”