Modelling, analysing and improving the revenue sharing contract in a one vendor-multi retailer supply chain based on the Stackelberg game theory

Hasan Rasay and Yahia Zare Mehrjerdi

International Journal of Manufacturing Technology and Management, 2017, vol. 31, issue 5, 402-423

Abstract: Considered supply chain in this article consists of one vendor and multiple retailers where the vendor applies vendor managed inventory in this system. Considering vendor as a leader and retailers as followers, Stackelberg game theory is applied for modelling and analysing of this system. A general mixed integer nonlinear model is presented that can explain the performance of the system under revenue sharing contract, wholesale price contract and centralised structure. Based upon this model, we numerically analysed the performance of the revenue sharing contract in the considered supply chain. Using numerical analysis, the weakness point of revenue sharing contract in supply chain coordination is investigated and a practical solution for improving the performance of this contract is introduced.

Keywords: supply chain; vendor managed inventory; VMI; Stackelberg game; decentralised; revenue sharing contract; wholesale price contract. (search for similar items in EconPapers)
Date: 2017
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