Abstract
This paper studies the coordination problem of a supply chain which is consisted of one supplier and one retailer. Based on a mathematical model, this paper analyzes how to adjust the production plan and pricing strategy to maximize the profit of the supply chain when market scale, price sensitivity coefficient and product cost are disrupted. We assume that the supplier and the retailer adopt revenue-sharing contract to coordinate the supply chain. If the mutation is small, the decision-maker wouldn’t adjust the production plan. If the mutation is large, the decision-maker had better adopt an improved revenue-sharing contract which has a stronger anti-disruption ability to adjust the production plan and pricing strategy. The new contract can coordinate the supply chain under mutation and realize the optimal allocation of the supply chain’s profit.
Highlights
As the global economy develops fast, thousands of global enterprises have benefited from a new subject named supply chain management
This paper establishes models to investigate the effect of market scale, production cost and price-sensitive coefficient disruption on the supply chain system robustness with exponential demand function
We design a combination of appropriate contract parameters to make the optimal decisions under a decentralized decision-making situation to achieve the centralized level
Summary
As the global economy develops fast, thousands of global enterprises have benefited from a new subject named supply chain management. Sudden natural disasters would cause different levels of interference to the supply chain. Such as pig epidemic in 2019, it has a great impact on meat processing companies and affects consumers’ demand for pork. Bozorgi A [5] used a buyback contract to coordinate the supply chain with stochastic demand when both the cost and price were disrupted. Supplier and retailer are both risk-neutral and rational, independent decision-makers. They both focus on their own interests respectively. Information such as retail price of products and inventory cost is symmetric
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