Revenue Sharing Contract of Supply Chain with Fuzzy Linear Demand

Abstract

In a two-stage supply chain composed of a supplier and a retailer, the supply chain models in fuzzy linear demand environment are researched. The parameters of market linear demand function are regarded as trapezoidal fuzzy numbers. The decision processes are analyzed under the decentralized and centralized decision, and the decision model with revenue sharing contract mechanism is also built by the method of fuzzy cut sets theory with fuzzy linear demand. It is shown that in fuzzy linear demand environment, the double marginalization effect is still existed in supply chain system; the profits of members can be coordinated by revenue sharing contract. Finally, a numerical is given to illustrate the model and the solution process.