Research on coordination of two-stage supply chain under random yield and random demand with contracts
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    Abstract:

    The contract-based supply chain ( SC) coordination problem of a two-stage SC under random yield and random demand is studied.In the addressed SC,the decision variables of the supplier and the producer are the agricultural input ( I) and the order quantity of raw material ( R) ,respectively.The uniqueness of the SC is that both the producer and the supplier are characterized by a random yield. For the random proportional yield,firstly the concavity of the expected profit function of the whole SC with respect to I and R is proved.Then,we show that the revenue-sharing ( RS) contract is not able to coordinate the chain. Lastly,a RS and yield risk-sharing contract is presented to coordinate the chain.The proposed contract is based on RS contract and bidirectional compensation for overproduction and shortage of raw material to share the risk of supply uncertainty.The coordination effectiveness of the proposed contract is theoretically proved,and is illustrated by two numerical examples. The results of numerical analysis show that the expected profit of the producer is more sensitive to the change of supply and demand uncertainty than that of the supplier.

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  • Online: April 17,2018
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