Revenue Share Contract Design with Marketing Strategy Types of Supplier

Hua He () and Changsong Ma
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Hua He: Management School of Xihua University, Chengdu, China
Changsong Ma: Tian Fu College of SouthWestern, University of Finance and Economics, Chengdu, China

Asia-Pacific Journal of Operational Research (APJOR), 2018, vol. 35, issue 02, 1-12

Abstract: In this paper, we design a revenue share contract when a supplier is the leader and a retailer is the follower in a two-echelon supply chain. The innovation lies in dividing the supplier’s marketing strategies into two types: the profit oriented and the sales oriented to distinguish the different decision objectives from previous literatures assuming the supplier and retailer are both profit oriented. The paper uses the revenue share contract to reach supply chain coordination and Pareto optimality in the supply chain with the profit-oriented suppliers. However, the contract makes supply chain collaboration solutions and the Pareto improvement with the sales oriented supplier conditional. Numerical examples are given to illustrate these cases.

Keywords: Revenue share contract; marketing strategy; supply chain coordination; Pareto optimality (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S021759591840002X

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