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Coordination of supply chain with revenue sharing contract in a fuzzy environment: Investigation and analysis

By Xuping Li and Jinsheng He

The coordination of a decentralized supply chain can be achieved by adopting supply chain
contracts. This paper investigates how a decentralized supply chain can be coordinated by a
revenue sharing contract, in which the supplier offers the retailer a lower wholesale price in
return for a percentage of the retailerís revenue. Salvage value and goodwill loss are taken
into consideration, since it is approximately close to the real world. Fuzzy variable is used
to denote the uncertain demand of the market, and investigation is given to illustrate the
relationship between the revenue sharing contract parameters in the fuzzy framework. Whatís
more, analysis of the optimal revenue sharing contract is presented to explain the reason why
the contract can maximize the total profit of the whole supply chain as well as uphold the
supplier and the retailerís profit.

Coordination supply chain has been a major issue in supply chain management research recently.
If all players of the supply chain unite under the coordination of the coordination system, they can
maximize both their profits and social benefits. However, it is di cult to put this ideal action into
practice in the decentralized supply chain since it involves the existence of several decision makers
pursuing di erent objectives, possibly conflicting among each other. Therefore, coordination of
such supply chains must be normalized by feasible mechanisms. Such mechanisms include the
supply chain contracts, through which the decision makers can unite their decisions to realize the
performance improvement of the supply chain system and achieve whole-system benefit. Thus, it is
becoming more and more significant to investigate supply chain contracts.

Download paper in pdf-format

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More Information on Supply Chain Management

A list of links to external articles is available in our
Knowledgebase - Operations - Supply Chain Management

     


 

 

 

 
 
 
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Status: 18. Januar 2008