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Coordination of supply chain with a dominant retailer under government price regulation by revenue sharing contracts

Xiaofang Liu, Jian Li (), Jun Wu and Guoqing Zhang
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Xiaofang Liu: Beijing University of Chemical Technology
Jian Li: Beijing University of Chemical Technology
Jun Wu: Beijing University of Chemical Technology
Guoqing Zhang: University of Windsor

Annals of Operations Research, 2017, vol. 257, issue 1, No 25, 587-612

Abstract: Abstract As the demands of some important products such as oil, gas, and agricultural commodities are disrupted, the government often regulates the retail price that includes impositions of a price ceiling and a price floor. In this paper, we analyze the coordination of a supply chain with a dominate retailer under the government price regulation policy by a revenue sharing contract after demand disruption. First, we characterize the optimal decisions of the supply chain under normal circumstance by the revenue sharing contract as a benchmark. Then, when the demand is disrupted, we redesign the contract to coordinate the supply chain and obtain the corresponding revenue sharing contract in different scenarios. Finally, we give some numerical examples to illustrate our theoretical results and explore the impacts of government price regulations on the coordination mechanism.

Keywords: Supply chain coordination; Price regulation; Dominant retailer; Revenue sharing contract; Demand disruption (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10479-016-2218-0

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