Closed-Loop Supply Chain Coordination by Revenue Sharing Contract and Quantity Discount Contract

The importance of remanufacturing has been recognized in research and practice. The integrated system, combining the forward and reverse activities of supply chains, is called closed-loop supply chain (CLSC) system. By coordination in the CLSC system, players will get economic improvement. This paper studies different coordination performances of two types of contracts, two-part tariff (TTC) and reverse revenue sharing contract (RRSC), in a closed-loop system. Through mathematical analysis based on Stackelberg Game Theory, we find that it is easy for manufacturer to improve more profits and retailer’s collection effects by adjusting the ratio of transfer collection price through RRSC, and we also give the function to calculate the best ratio of transfer collection price, which may be a valuable reference for the decision maker in practice. Besides, our results also suggest that although the profits of the coordinated CLSC system are always higher than the contradictory scenario, the RRSC is more favorable to the manufacturer than to the retailer, as results show that the manufacturer will share more profits from the system through RRSC. Therefore, RRSC has attracted the manufacturers more to closing the supply chain for economic consideration.

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Research on Coordination of Closed-Loop Supply Chain Revenue Sharing Contract Under Disruption

Proceeding of the 24th International Conference on Industrial Engineering and Engineering Management 2018 ◽

10.1007/978-981-13-3402-3_59 ◽

2019 ◽

pp. 558-565 ◽

Cited By ~ 1

Author(s):

Qiao-na Song

Keyword(s):

Supply Chain ◽

Closed Loop ◽

Revenue Sharing ◽

Closed Loop Supply Chain ◽

Revenue Sharing Contract

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Coordinating Three-Level Supply Chain by Revenue-Sharing Contract with Sales Effort Dependent Demand

Discrete Dynamics in Nature and Society ◽

10.1155/2014/561081 ◽

2014 ◽

Vol 2014 ◽

pp. 1-10 ◽

Cited By ~ 7

Author(s):

Qinghua Pang ◽

Yuer Chen ◽

Yulu Hu

Keyword(s):

Supply Chain ◽

Numerical Experiments ◽

Supply Chain Coordination ◽

Revenue Sharing ◽

Optimal Contract ◽

Improve Performance ◽

Quantity Discount ◽

Revenue Sharing Contract ◽

The Impact ◽

Dependent Demand

Revenue-sharing contract is a kind of mechanism to improve performance or to achieve perfect coordination of supply chain. Considering a three-level supply chain consisting of a manufacturer, a distributor, and a retailer who faces a stochastic and sales effort dependent demand, the paper analyzes the impact of sales effort on supply chain coordination and expounds the reasons why traditional revenue-sharing contract cannot coordinate supply chain in this condition. Given three cases: only the retailer bears the sales effort cost, only the manufacturer bears the sales effort cost, and the retailer bears the sales effort cost with the manufacturer, the paper proposes an improved revenue-sharing contract based on quantity discount policy to coordinate the supply chain. It illustrates that improved revenue sharing contract can coordinate supply chain by implementing it in one transaction or two transactions of three-level supply chain. The model of improved revenue-sharing contract is optimized, respectively, by addition form and multiplication form with sales effort dependent demand. Formulas are given to determine the optimal contract parameters. Finally, numerical experiments are given to test the accuracy of the model of improved revenue-sharing contract.

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A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

Sustainability ◽

10.3390/su10093198 ◽

2018 ◽

Vol 10 (9) ◽

pp. 3198 ◽

Cited By ~ 7

Author(s):

Hao Zou ◽

Jin Qin ◽

Peng Yang ◽

Bo Dai

Keyword(s):

Decision Making ◽

Supply Chain ◽

Risk Aversion ◽

Closed Loop ◽

Wholesale Price ◽

Revenue Sharing ◽

Coordination Mechanism ◽

Closed Loop Supply Chain ◽

Revenue Sharing Contract ◽

Decentralized Decision Making

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio.

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