Supply chain coordination of biomass moulding fuel under random supply and cyclical demand

Abstract

Purpose The purpose of this paper is to design a contract to coordinate the biomass molding fuel supply chain consisting of a supplier with uncertain supply and a producer with cyclical demand as well as improve the profit of this supply chain. Design/methodology/approach In this paper, the supply chain model was build and all the variables and assumptions are set. Stackelberg game model was used to analyze and solve the problem. Furthermore, the authors give numerical examples and result analysis on the basis of data coming from field study and online information about a real biomass fuel supply chain. Findings The wholesale price with shortage penalty contract the authors proposed can coordinate the supply chain. And as the dominator of the supply chain, the producer can realize the redistribution of profits within the supply chain by determine the contract parameters. Research limitations/implications This one-to-one supply chain is a basic of complex supply chain system. Multi-to-one, one-to-multi and multi-to-multi supply chain can be studied in the future. Originality/value The results obtained in this paper can be used as a reference for enterprises in biomass energy supply chain to make contracts and realize the long-term co-operations among supply chain members.