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Demand disruption and coordination of supply chain via effort and revenue sharing

Author

Listed:
  • Yanyan Zheng
  • Tong Shu
  • Shouyang Wang
  • Shou Chen
  • Lai
  • Lu Gan

Abstract

This article explores the equilibrium behaviour of a basic supplier-retailer distribution channel under demand disruption via effort and revenue sharing contract. This differs from the traditional supply chain coordination model. Firstly, demand is simultaneously affected by retail price and nonprice marketing effort from manufacturers and retailers. Secondly, when the demand is disrupted, this article considers disruptions in the market scale and price sensitivity coefficient. Thirdly, the supply chain coordination model is proposed via effort and revenue sharing contract. In this way, the manufacturer reduces the wholesale price as an incentive for the retailer to share revenue. Finally, the total supply chain profit is greater with contract than no contract. This also constitutes another incentive for the players to follow the effort and revenue sharing contract.

Suggested Citation

  • Yanyan Zheng & Tong Shu & Shouyang Wang & Shou Chen & Lai & Lu Gan, 2015. "Demand disruption and coordination of supply chain via effort and revenue sharing," Applied Economics, Taylor & Francis Journals, vol. 47(54), pages 5886-5901, November.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:54:p:5886-5901
    DOI: 10.1080/00036846.2015.1058914
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    Cited by:

    1. Zheng, Yanyan & Zhao, Yingxue & Wang, Nengmin & Meng, Xiaoge & Yang, Honglin, 2022. "Financing decision for a remanufacturing supply chain with a capital constrained retailer: A study from the perspective of market uncertainty," International Journal of Production Economics, Elsevier, vol. 245(C).

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