Supply Chain Coordination Under Consignment Contract with Revenue Sharing

Sijie Li (), Jia Shu () and Lindu Zhao ()
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Sijie Li: Southeast University
Jia Shu: Southeast University
Lindu Zhao: Southeast University

A chapter in Supply Chain Coordination under Uncertainty, 2011, pp 427-454 from Springer

Abstract: Abstract The balance of power between manufacturers and retailers is shifting, and consignment contract with revenue sharing has been widely applied in many industries, especially in on-line marketplaces. In this chapter we consider a supply chain with an upstream manufacturer and a downstream retailer where a single-period product is produced and sold. The manufacturer chooses the delivery quantity and the retail price, and the retailer sets the revenue shares. Utilizing Nash bargaining model, a cooperative game model is developed to implement profit sharing between the manufacturer and the retailer to achieve their cooperation. When the manufacturer and the retailer are assumed to be risk-neutral, under a very mild restriction on the demand distribution, the decentralized supply chain can be perfectly coordinated, and both players can earn more in the proposed cooperative setting. Furthermore, the impacts of supply chain system parameters on the optimal supply chain decisions and the supply chain performance are investigated in this chapter.

Keywords: Consignment contract with revenue sharing; Cooperative game; Supply chain coordination; Uncertainty (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:spr:ihichp:978-3-642-19257-9_17

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DOI: 10.1007/978-3-642-19257-9_17

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