Demand disruption and coordination of supply chain via effort and revenue sharing |
| |
| Authors: | Yanyan Zheng Shouyang Wang Shou Chen Kin Keung Lai Lu Gan |
| |
| Institution: | 1. Business School of Hunan University, Changsha, Hunan 410082, China;2. Academy of Mathematics and Systems Sciences, Chinese Academy of Sciences, Beijing 100080, China;3. International Business School, Shaanxi Normal University, Xi’an 710062, China;4. Department of Management Sciences, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong, China;5. Office of Humanities and Social Sciences, Hunan University, Changsha, Hunan 410082, China |
| |
| Abstract: | This article explores the equilibrium behaviour of a basic supplier–retailer distribution channel under demand disruption via effort and revenue sharing contract. This differs from the traditional supply chain coordination model. Firstly, demand is simultaneously affected by retail price and nonprice marketing effort from manufacturers and retailers. Secondly, when the demand is disrupted, this article considers disruptions in the market scale and price sensitivity coefficient. Thirdly, the supply chain coordination model is proposed via effort and revenue sharing contract. In this way, the manufacturer reduces the wholesale price as an incentive for the retailer to share revenue. Finally, the total supply chain profit is greater with contract than no contract. This also constitutes another incentive for the players to follow the effort and revenue sharing contract. |
| |
| Keywords: | demand disruption effort and revenue sharing contract supply chain coordination |
|
|
