Study on the Improvement of Performance of Global Supply Chain Based on Quantity Flexibility Revenue Sharing Contract

Yang Liu

Asian Agricultural Research, 2015, vol. 07, issue 07, 6

Abstract: The main propose of this study is to manage the demand risk and the exchange rate risk at the same time. Based on a two-echelon decentralized global supply chain, combined with the model equilibrium, this paper studies the difference between the quantity flexibility contract and the revenue sharing contract. By the transmitting of exchange rate risk, it discusses the node-enterprises' optimal strategies. Hence, it designs a quantity-flexibility-revenue-sharing contract to improve the performance of this global supply chain. The result shows that both the quantity flexibility contract and the revenue sharing contract cause the exchange rate risk to transfer from one enterprise to the other; the exchange rate risk will have different impact on the quantity flexibility contract and the revenue sharing contract because of the difference in the transfer payments at the end of the sales season; by designing a hedging strategy with these two different transfer payments, the quantity-flexibility-revenue-sharing contract can manage the demand risk and the exchange rate risk at the same time.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asagre:209839

DOI: 10.22004/ag.econ.209839

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