Abstract
A joint contract is proposed to coordinate the time-varying supply chain of risk-averse manufacturers and retailers. The joint contract uses price reduction subsidies and revenue-sharing strategies to enable manufacturers and retailers to share risks and achieve overall coordination of the supply chain. Firstly, a centralized and a decentralized decision-making model of the risk-averse supply chain are established. On this basis, reasons for the supply chain failure to coordinate are analyzed, and a joint contract is designed. Then, the specific form of the joint contract is given. Finally, the coordination effect of the joint contract is quantitatively analyzed through numerical analysis.
Highlights
With the shortening of product renewal cycle, product competitiveness is related to price and quality and closely related to order response time
Different from the above research, this paper comprehensively considers the time-varying characteristics and riskaversion characteristics in the actual operation of the supply chain and re-establishes the supply chain decision-making model. e model uses prospect theory as a risk measurement tool, taking into account the double randomness of market demand and order response time
We design a joint contract of price reduction subsidy and revenue sharing based on order response time and discuss the conditions that the contract parameters should be optimized
Summary
With the shortening of product renewal cycle, product competitiveness is related to price and quality and closely related to order response time. E contribution of this paper is to design a new coordination contract which considers the risk preference of supply chain members and time-varying characteristics By this way, in the coordinated operation of the supply chain, we can get the best decision which is suitable for the actual operation of the supply chain. Chen and Chou [5] studied the multilayer supply chain network with time-varying market demand and related costs and described the dynamic law of price and order decisionmaking of supply chain members with time by establishing a model. E model uses prospect theory as a risk measurement tool, taking into account the double randomness of market demand and order response time On this basis, we design a joint contract of price reduction subsidy and revenue sharing based on order response time and discuss the conditions that the contract parameters should be optimized
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