Research of revenue sharing contract in many-to-one and retailer-dominant supply chain with fuzzy demand

Abstract

In a two-stage supply chain composed of two manufacturers and one dominant retailer, the supply chain revenue sharing contract coordination mechanism is researched under a fuzzy and price-depended demand environment. The market demand was regarded as a triangular fuzzy number. Based on the newsvendor model and the fuzzy cut sets theory, decentralized decision model, centralized decision model and the decision model with revenue sharing contract mechanism were built, meanwhile their optimal policies were also presented. Finally, numerical example was applied to resolve parameters in these models, and results were analyzed. It shows that under the fuzzy demand environment, the double marginalization effect still exists in the many-to-one and retailer-dominant supply chain, but revenue sharing contract mechanism can coordinated the members of supply chain; both income distribution coefficient and the profits of the whole supply chain have a positive relationship with the substitutability between products.