Revenue sharing-commission coordination contract for community group buying supply chain considering promotion effort

Abstract

As a novel retail model in the age of Internet Plus, community group buying (CGB) has received a growing attention from the public. This paper introduces promotion effort (PE) and service level (SL) into system decision-making, and tries to coordinate the CGB supply chain comprising of a supplier, a group buying platform, and a group leader. Firstly, the authors constructed a decentralized decision-making model and a centralized decision-making model for the CGB supply chain, and solved the optimal decisions and profits of each model. On this basis, a coordination mechanism was designed for the CGB supply chain. After that, the model results were verified through numerical simulation. The results show that: Under the decentralized decision-making model, the wholesale price, retail price, platform SL, and leader’s PE are positively correlated with the elastic coefficient of PE, and negatively with the effort cost; under the centralized decision-making model, the retail price, platform SL, and leader’s PE are positively correlated with the elastic coefficient of SL, and negatively with the service cost; using the group leader’s commission as a coordination tool and combining with the traditional revenue sharing contract, the revenue sharing-commission coordination (RS-CC) contract is designed to realize the coordinated operation of the CGB supply chain. The research findings further enrich and improve the theoretical basis of the CGB supply chain, and provide a reference for the decision-making by relevant enterprises.