Revenue-sharing Contract Research Articles

Will the embedded service in supply chains play a role in lowering manufacturer’s carbon emission and maintaining economic growth?

Introduction: The carbon cap and trade mechanism (CCTM) is forcing companies to reduce carbon emissions. Due to financial and technical constraints, manufacturers responsible for recycling and remanufacturing begin to seek embedded services from energy service companies (ESCOs), marking the emergence of embedded low-carbon service supply chains. The purpose of this paper is to explore the role of embedded low-carbon service in supply chains in lowering manufacturer’s carbon emissions and maintaining economic growth.Methods: In this paper, a decision model for risk-averse closed-loop supply chain for embedded low-carbon service in uncertain markets is built by using the Stackelberg theory and mean-variance (MV) approach. Equilibrium decisions, the manufacturer’s expected utility growth, and total carbon emission reduction are obtained. Sensitivity analysis is performed for the main parameters.Results: The results indicate that only when the manufacturer’s risk aversion level and consumers’ low-carbon preference are within the range of 0.35–0.9, can the manufacturer bring in embedded low-carbon service by cooperating with an ESCO through revenue-sharing contracts. When there is a higher carbon price, embedded low-carbon service can further increase the manufacturer’s expected utility, maintain economic growth and reduce carbon emissions.Discussion: Embedded low-carbon service in supply chains can play a role in lowering manufacturers’ carbon emissions and maintaining economic growth when the manufacturer’s risk aversion level, carbon price, and consumers’ low-carbon preference are high. Theoretically, this study combines closed-loop supply chains (CLSCs) and embedded low-carbon services, enriching supply chain theories. In addition, the findings provide managerial insights for manufacturers, ESCOs, and governments.

Automaker’s credits strategy considering fuel consumption and endurance capacity constraints under dual-credit policy in China

After implementing the Dual-credit policy, automakers must adjust their production and operation strategies to cope with policy changes. This paper studies an automotive supply chain consisting of an automaker that produces traditional fuel vehicles and new energy vehicles and a dealer as the research object. Meanwhile, this paper constructs a trading strategy and a cooperative strategy model considering consumers’ fuel consumption sensitivity and endurance capacity sensitivity. This paper also compares decentralized and centralized decision-making of automotive supply chain under different strategies. Furthermore, this paper compares and analyzes the optimal credits strategies of automaker with different investment amounts. The research finds that automaker can obtain positive new energy vehicle credits (NEV credits) through direct trading or by cooperatively obtaining NEV credits with other automakers. Whether automaker chooses the trading strategy or the cooperative strategy, members’ profits of centralized decision-making in automobile supply chain are better than decentralized decision-making. When the investment amount of automaker is small, the cooperative strategy is more advantageous. After coordination through the revenue-sharing contract, the benefits of supply chain members reach Pareto optimality. This paper helps enterprises effectively deal with the Dual-credit policy and provides a reference for achieving carbon emission reduction targets in China.

Low-Carbon Supply Chain Coordination Based on Carbon Tax and Government Subsidy Policy

To meet the demands of society’s transition to a low-carbon economy, this study analyzes and designs a coordination contract that is suitable for a low-carbon supply chain, under the circumstances of a carbon tax policy and government subsidies; this is to achieve a reduction in emissions and a growth in the total profits of the supply chain, while simultaneously improving the sustainable competitiveness and coordination of the supply chain. Manufacturers and retailers make up the two levels of the supply chain that are the focus of this study. Both centralized and decentralized decision-making models are created using the Stackelberg game method. By analyzing the supply chain decision-making and emission-reduction strategies in both cases, the revenue-sharing contract is designed to achieve the sustainable coordination of the y chain. The results of the numerical analysis show the following: first, that more orders are placed and emissions are reduced under centralized decision-making than under decentralized decision-making; second, that the total supply chain’s profits are higher when all parties comply with the revenue-sharing contract than when there are no contracts; third, that the revenue-sharing contract allows for the free allocation of supply chain gross margins in the enterprise for supply chain coordination.

Investment strategies and coordination for green food supply chain: a further research considering the inputs of the blockchain-based traceability system

PurposeTo study these issues, the authors chose a GFSC with one producer and one material supplier as research object, the supplier will offer green material to the producer and the producer will make green food using green production technology. Then, the authors proposed that consumers' perceived value was determined by the trustworthiness levels of the related green and quality-safety information provided by the supplier and the producer. Then, considering the trustworthiness levels of the green and quality information provided by the supplier and the producer, the authors improved the demand function. Afterwards, we constructed four investment models and their income models are built and then a cost-sharing and revenue-sharing contract (hereafter, CSRS) was adopted to coordinate the GFSC.Design/methodology/approachWith the growth of consumers environmental awareness and life level, consumers' requirements for green and high quality food are growing. In recently years, to increase consumers' perceived trustworthiness on the product greenness and quality levels, stakeholders in green food supply chain (hereafter, GFSC) start to adopt the blockchain-based traceability system (hereafter, BLTS). For investors, they need to know the investment conditions and how to coordinate the GFSC.Findings(1) When the revenue-sharing coefficient is less than three-fourths and higher then a certain vaule, the cost-sharing and revenue-sharing contract can make the GFSC coordinate. (2) The investment cost threshold of the BLTS has a positive relationship with the trustworthiness improvement levels of the green and quality information, the green degree of food products and the quality of food products. (3) In the proposed four investment situations, as the growth of consumers perceived credibility coefficient about the greenness information and the quality information, chain members' revenues will increase. In addition, comparing with co-investing the BLTS, benefits of chain members are lower than them in the sole investment model.Originality/value(1) The demand function we proposed can help chain members forecast market demand to support production or ordering decisions. (2) The investment decision policies can offer a theoretical reference for chain members to use the BLTS. (3) The CSRS will offer the theoretical reference for coordinating the supply chain after using the BLTS. Furthermore, our study method can be referenced by other scholars. (4) The study method can offer a method reference for researchers who do a similar discussion in a manufacturing supply chain. Although, our research cannot guide the industrial practices, it can serve as a reference of the similar research in industry.

Competition model and contract design for supply chain with green products under yield uncertainty

This paper considers a supply chain (SC) in which the manufacturer produces and sells green products to consumers through two competing retailers. We assume that the manufacturer's yield is uncertain, and then conduct the integrated and the decentralized SC models. A comparison analysis of these two SC models is further performed. The results show that the profit under the integrated SC model is higher than that under the decentralized SC model, which means that there exists double marginalization under the decentralized SC. Then, the cost-sharing contract and the revenue-sharing contract are introduced to improve the decentralized SC. We find that both contracts can not only enable the manufacturer to improve the green degree, but also enable the retailers to order more green products. The main difference between these two contracts is dug out: Compared the situation without any contract, the manufacturer charges a higher wholesale price under the cost-sharing contract, but charges a lower wholesale price under the revenue-sharing contract. In addition, the profits of all SC members can be improved after reasonable designs of these two contracts, thus achieving the Pareto improvements. Finally, we introduce numerical analysis to illustrate and exhibit theoretical conclusions.

How points-exchange incentives in a closed-loop supply chain weaken competition from the informal recycler

<p style='text-indent:20px;'>To reduce the negative impact of informal recycling on the environment, we consider the competition in the recycling industry to explore the manufacturer's collection channel choice and the optimal points-exchange level. In this paper, a closed-loop supply chain model including a manufacturer and an informal recycler (IR) is constructed. Stackelberg game theory is used as a theoretical guide. In addition, we study the optimal decision problem under the profit maximization model. We find that the points-exchange offer increases the sales of new products and alleviates competition from IR. The manufacturer prefers to personally implement points-exchange activities to directly collect used products from consumers when the disposal revenue of IR is low. The manufacturer's exchange strategy forces IR to increase the acquisition price and face large cost pressure, which significantly reduces the collection quantity of IR. In the coordination problem, the revenue-sharing contract allows both the manufacturer and the third party to be in a win-win situation. We focus on the effectiveness of points-exchange incentives for manufacturers and third parties. Future research could explore the diversity of exchange offers by including government agencies in the closed-loop supply chain.</p>

Fresh food supply chain coordination with competition and differentiated freshness preservation methods

For a secondary supply chain consisting of a supplier and two competing retailers, freshness spoilage rate, competitive behavior and market capacity constraint are introduced into the traditional demand-substitution model. Under different preservation methods such as chilling and freezing, the Gounod double oligopoly game and the conspiracy game competition models between retailers are constructed with the benchmark of the centralized decision-making. The optimal sales price and ordering decision are secured, and the influence of market volume, freshness deterioration rate and demand substitution rate on the optimal decision is analyzed under different competition models. Meanwhile, an optimal revenue coordination contract is constructed to maximize the benefits of each subject in the fresh supply chain. The results show that the optimal sales price and optimal order quantity are positively correlated with the respective market volume and demand substitution rate, but negatively correlated with the deterioration rate of goods. The optimal coordination degree of the proposed revenue-sharing contract is 100%, which indicates that this contract can effectively coordinate the interests of all parties in the fresh supply chain and achieve the overall optimal supply chain.

The Impact of Revenue-Sharing Contracts on Parallel Shipping Alliances

The Impact of Revenue-Sharing Contracts on Parallel Shipping Alliances

Coordinated Decision-Making in Embedded Supply Chain from a Sustainable Development Perspective

Government carbon policies and consumers’ preferences are forcing companies to reduce their carbon emissions. Due to financial and technical constraints, carbon-dependent manufacturers are seeking embedded services from energy service companies. By considering these government carbon policies and consumer preferences, this paper constructs a revenue-sharing contract and a two-part contract model for an embedded low-carbon service supply chain using the Stackelberg game to investigate the contractual coordination between the manufacturer and energy service company and their optimal decision making. The equilibrium decisions and the selection of contracts in the supply chain with different parameter levels were obtained. The model’s validity was verified through numerical simulation analysis, and the impacts of the main parameters on the equilibrium decisions and expected utility for the supply chain were analyzed. The results showed that both contracts would enable manufacturers and low-carbon service providers to achieve profit maximization goals when the parameters meet certain constraints. Changes in consumers’ low-carbon and low-price preferences can cause manufacturers to change their business strategies. In addition, the level of technology of ESCOs affects the selection of the type of contract between manufacturers and energy service companies. The findings described in this paper can provide management insights for manufacturers regarding carbon reduction in practice.

Collaborative adoption of blockchain technology: A supply chain contract perspective

The outbreak of COVID-19 has significantly affected the development of enterprises. In the post-pandemic era, blockchain technology has become one of the important technologies to help enterprises quickly gain market competitiveness. The heavy investment required of supply chain stakeholders to employ blockchain technology has hindered its adoption and application. To tackle this issue, this study aims to facilitate the adoption of blockchain technology in a supply chain consisting of a core enterprise and a small/medium-sized enterprise through an effective supply chain contract. We analyze the performance of a cost-sharing (CS) contract and a revenue-sharing (RS) contract and propose a new hybrid CS-RS contract for better performance. We conduct comparative analyses of the three contracts and find that the hybrid CS-RS contract can more effectively incentivize both parties to reach the highest level of blockchain technology adoption and achieve supply chain coordination.

Two-echelon fresh product supply chain with different transportation modes.

The fresh product supply chain suffers from the quantity loss and quality loss due to its perishability in long-distance transportation, which affect the health of customers and the sustainable development of supply chain. Using low-cost normal temperature transportation or high-cost cold chain transportation has become a problem for transportation enterprises. This paper aims to investigate the impact of different transportation modes on the supply chain performance. The operation strategies of the supply chain are analyzed under three situations: no coordination contract, wholesale price contract, and revenue-sharing contract. Taking Zhanhua winter jujube as an example, the correctness of theoretical analysis is verified. The main findings are as follows. Supply chain participants, including consumers, can benefit from cold chain transportation. That the cost of cold chain transportation is below the threshold is the basic condition to use cold chain transportation. The retailer has the incentive to encourage the supplier to use cold chain transportation by increasing the wholesale price, but the wholesale price should be set within a certain range. The supplier has the incentive to use cold chain transportation under the revenue-sharing contract, but the revenue-sharing proportion needs to be within a certain range to ensure the retailer's profit. The revenue-sharing contract is superior to the wholesale price contract, and wholesale price contract is superior to no coordination contract.

Co-creation of mobile app quality in a two-platform supply chain when platforms are asymmetric

Mobile app development is a fast-growing industry, with Google Play and App Store being the two largest platforms, which provide app developers with a global audience. While each platform has its own captive app users, developers have the freedom to distribute their app via either a single platform or both. In the latter case, developers need to create two versions of the app, which differ in terms of their conformance quality (dictated by the platform), but share the same design quality (defined by the developer). We demonstrate that the cross-platform design quality results in a fee-allocation mechanism, according to which when one platform increases the developer's revenue share, it pushes the other platform to reduce the revenue share that it offers to the developer. The innovation of this work lies in considering the co-creation of app quality in a two-platform supply chain operating under a revenue-sharing contract. We analyze a stylized model with two asymmetric platforms, where the developer may be either profit-driven or market-expansion driven. In the former case, the inferior platform is at risk of losing the contract and therefore has to adjust it. Equilibrium analysis is provided for two market-power structures — balanced and imbalanced. Several counterintuitive properties of the equilibrium are obtained: (i) by becoming less efficient in the apps’ approval process, the platforms may coordinate the supply chain; (ii) an increase in the market size of a platform may degrade its profit; and (iii) a low price of the in-app product is not necessarily linked to a poor-quality app.

Robust contract design and coordination under consignment contracts with revenue sharing

We study a classical supply chain consisting of a supplier and a retailer in which the former can sell the product through the latter under a consignment contract with revenue sharing. In this case, the supplier faces both uncertain yield (supply) and demand. In practice, it is difficult to precisely elicit the joint probability distribution of random demand and yield. Therefore, we investigate how to match demand with supply for supply chain when only partial distribution parameters, such as the first-two moments, are known. We use a distributionally robust approach to solve this challenge within the framework of a stylized two-stage Stackelberg game model. Under centralized and decentralized settings, a simple closed-form expression of the optimal robust production quantity that can properly match supply and demand can be completely characterized. Then, by comparing the performance of the two settings, we show that a supply chain double-marginalization issue exists. As such, we propose a subsidy mechanism based on a revenue-sharing contract to improve supply chain performance, and also prove the existence of a Pareto-improvement set, which can plausibly overcome the low efficiency of the supply chain. Our numerical studies further observe the impact of demand and yield uncertainty on the double-marginalization effect, the Pareto-improvement set, and both contract parties' expected profit loss. We also extend our model to consider the case of endogenizing pricing and asymmetric demand information.

S&T Innovation Platform Sharing Service Contract Mechanism to Achieve Supply Chain Resilience

While achieving fruitful patents in innovation, enterprises can face bottlenecks in industrial transformation. The fundamental cause of such difficulties is the lack of pilot equipment. To this end, the science and technology (S&T) innovation platform introduces equipment sharing to solve the problems in transforming enterprise patents. Based on the premise that service demand is endogenous to platform service effort and user relationship resilience, this paper introduces revenue-sharing and cost-sharing contract mechanisms. It constructs a Stackelberg game model between S&T innovation platforms and enterprise users. Further, we explore the decision-making optimization involving platform service pricing, service effort, and a user’s relationship resilience. Our main findings are: (1) service pricing and relationship resilience show supermodularity to the platform revenue while showing submodularity to the user revenue. (2) The optimal user relationship resilience always indicates a decreasing trend in the pricing of platform services. (3) The platform and users have their preferences for contract types. When the platform dominates the game, they tend to adopt a revenue-sharing contract. When the users dominate, they are more willing to implement a cost-sharing contract. (4) As the S&T innovation platform strengthens the connection between the platform and users through the revenue- and cost-sharing contracts, it further enhances the supply chain collaboration among equipment suppliers, technology innovation platforms, and users, thereby achieving the purpose of improving supply chain sustainability and resilience. Technological innovation is an essential means to improve supply chain sustainability and resilience.

Construction of Equilibria in Strategic Stackelberg Games in Multi-Period Supply Chain Contracts

Almost every supplier faces uncertain and time-varying demand. E-commerce and online shopping have given suppliers unprecedented access to data on customers’ behavior, which sheds light on demand uncertainty. The main purpose of this research project is to provide an analytic tool for decentralized supply channel members to devise optimal long-term (multi-period) supply, pricing, and timing strategies while catering to stochastic demand in a diverse set of market scenarios. Despite its ubiquity in potential applications, the time-dependent channel optimization problem in its general form has received limited attention in the literature due to its complexity and the highly nested structure of its ensuing equilibrium problems. However, there are many scenarios where a single-period channel optimization solution may turn out to be myopic as it does not consider the after-effects of current pricing on future demand. To remedy this typical shortcoming, using general memory functions, we include the strategic customers’ cognitive bias toward pricing history in the supply channel equilibrium problem. In the form of two constructive theorems, we provide explicit solution algorithms for the ensuing Nash–Stackelberg equilibrium problems. In particular, we prove that our recursive solution algorithm can find equilibria in the multi-periodic variation of many standard supply channel contracts such as wholesale, buyback, and revenue-sharing contracts.

Marine tourism omnichannel coordination

PurposeWith the growing economic impact of e-commerce and the increasing trend of omnichannel mode, more considerate services can be provided to customers. This paper aims to explore the optimal practice of business strategies and enrich the research content of marine tourism omnichannel.Design/methodology/approachThis paper studies the optimal practice of bundling pricing and service effort strategies between two tourism suppliers (TSs) and a travel agent (TA) who distributes complementary products in marine tourism omnichannel considering joint efforts of both sides. This study develops five models by Stackelberg and Nash game and introduces the revenue-sharing contract. All outcomes/results are analyzed and the corresponding numerical and sensitivity analyses are conducted to derive more managerial implications and business insights.FindingsThe main findings show that bundling price is directly proportional to inter-channel integration coefficient and service effort level coefficient, and inversely proportional to the price elasticity coefficient. TA tends to provide a higher level of service effort than TSs when TA plays a dominant role. Improving the service effort level unduly leads to a decline in profits. Moreover, TSs and TA can reach a win-win situation under the coordination mechanism and the marine tourism omnichannel can achieve the best performance.Originality/valueA novel and useful approach towards joint equilibrium decisions of bundle pricing and service efforts in marine tourism omnichannel with complementary tourism products under different operational strategies is proposed.

Cooperative Advertising in Dual Channel Supply Chain System with Different Contracting Schemes

This paper deals with the efficacy of revenue-sharing and cost-sharing contracts in a dual-exclusive channel, in which each manufacturer announces a cooperative advertising policy, such as cost-sharing contract, revenue-sharing contract, or neither of them, to its retailer. Under such cooperative advertising schemes, two models are developed—one in which each manufacturer determines the sharing rate endogenously or exogenously under the Stackelberg game approach and the other in which each manufacturer and its exclusive retailer cooperatively determine the sharing rate under the Nash bargaining approach. Some counterintuitive findings suggest that the advertising coordination mechanism critically depends on parameters, such as the basic demand share and product substitution. Most notably, the higher sharing rate can lead the retailer’s performance to be worse, especially when the competition becomes fierce. Furthermore, the cost-sharing contract is more beneficial to the cooperative advertising mechanism than the revenue-sharing contract.

Encroachment strategy and revenue-sharing contract for product customization

This paper investigates the optimal encroachment strategy of product customization and the revenue-sharing contract in a two-stage supply chain consisting of a contract manufacturer (CM) and an original equipment manufacturer (OEM). In addition to producing and wholesaling standard products for OEM, CM has the motive to manufacture customized products under store brand and encroach the end consumer market. Stackelberg game models with different strategies (encroachment or no-encroachment) under both decentralized and centralized supply chains are explored. Models analyzing CM’s encroachment with product customization are rare. Besides, this paper characterizes both vertical partnership and horizontal competitive relationships between supply chain members. The findings show that it is unprofitable to encroach on the retailing market for CM when the acceptance degree of store brand is low. There is a threshold value of customization level that can gain positive demand. Interestingly, as the Stackelberg leader, OEM always suffers from the encroachment. Then a revenue-sharing contract is designed that can fully integrate the decentralized supply chain and obtain a contract-implementing Pareto zone. Furthermore, a numerical example is developed, demonstrating the validity of the obtained analytical results. On this basis, some suggestions for industry managers are discussed in the form of managerial insights.

Supply chain coordination based on the probability optimization of target profit

Supply chain management decision-making study mainly based on the expected utility theory and most of the studies are obtaining the average values in the statistical sense. For Supply Chain (SC) decision-making individuals the statistical-based optimal profitability brings decision conflicts in the particular market within a specific period. Moreover, the small and medium outsourcing participants face unexpected outcomes which are the main cause of SCs disruption. This study proposes a contractual coordination model that maximizes the probability of a pre-determined Profit Target (PT). The purpose of this paper is to reduce the influence of demand uncertainty with the high risk of unexpected outcomes. We constructed the Revenue Sharing (RS) and buyback contract models within the SC participants’ PT conditions and then discussed the SC overall performance. We simulated and analyzed the coordination conditions and the decision-making preferences of SC participants under the two contracts. From the comparison, under the PT strategy, the retailer is more willing to adopt the RS contract rather than the buyback contract. But the SC upstream supplier's contract selection decision depends on the specific contract parameters. Finally, numerical results indicated the contract selection decisions with the given PT of both SC participants.

Influence of corporate social responsibility considering dual-channel recycling competition and privacy information protection

When conducting transactions of recycling, consumers are now paying more attention to information security, concerning the problem of information leakage. From this perspective, we aim to testify whether constructing offline stores combined with privacy information protection to guarantee information security is worthwhile, and what is the effects of Corporate social responsibility (CSR) on profits of competing companies with dual-channel recycling. We build up models to examine the effects of the offline store construction integrated with privacy information protection on profits of companies. Moreover, we construct several models with the total utility of the enterprise to further evaluate the effect of CSR, which composes of the net profit and the CSR utility under different CSR consideration. The CSR is taken by no entities, only entity with offline channel, only entity with online channel and both entities, respectively. The results show the competing companies could gain the most earnings in the situation that both channels consider CSR, while only the offline channel considers CSR is the worst choice. In addition, the revenue-sharing contract and cost-sharing contract could optimize the profit of enterprise constructing privacy information protection, and the former is better than the latter. This study gives insights into the construction of privacy information protection and the consideration of CSR activities of enterprises, which in turn help boost the recycling process and achieve environmentally sustainable of the recycling industry.