Supply Chain Network Equilibrium with Profit Sharing Contract Responding to Emergencies

Abstract

In the real market competition, the supply chain network equilibrium state is too ideal to obtain and contracts can be used to coordinate the supply chain network. In this paper, we establish a supply chain network equilibrium model with random demands and introduce profit sharing contract to the supply chain network model in order to be equilibrium. Then analyze the impacts that emergencies have on this equilibrium state. Through numeral examples we prove that the manufacturers and retailers can adjust the contract parameters to achieve a new supply chain network coordination state through bargaining when the demands increase suddenly as a result of emergent events.