scholarly journals Profit Seeking versus Survival Seeking: Green Investment of Capital-Constrained Suppliers with Incentive Contracts

2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
Bing Xia ◽  
Junling Zhang
Keyword(s):  
Supply Chain ◽  
Demand Uncertainty ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Incentive Contracts ◽  
Large Parameter ◽  
Revenue Sharing Contract ◽  
Capital Constraints ◽  
Green Investment ◽  
Large Parameter Space

This study explores a supply chain with a capital-constrained startup supplier who invests in product greenness and a manufacturer who sells green products to consumers under demand uncertainty. Green investment of the supplier is supported by the manufacturer with two incentive contracts: (i) investment- and (ii) revenue-sharing contracts. Profit- and survival-seeking objectives are considered for the startup supplier. Results show that the profit-seeking supplier increases its product greenness if demand uncertainty rises, whereas the survival-seeking supplier increases its product greenness if its capital constraints increase. Compared with the commonly used wholesale price contract, investment- and revenue-sharing contracts can help facilitate the “win-win” supply chain cooperation for improving product greenness. If the profit-seeking supplier cooperates with the manufacturer, the investment-sharing contract is preferred as the demand uncertainty increases. If a survival-seeking supplier cooperates with the manufacturer, the revenue-sharing contract is preferred as the capital constraint increases. Overall, the revenue-sharing contract is preferred given the high attractiveness of the green investment. By extending the discussion into two periods, the revenue-sharing contract will be preferred in the survival-seeking case because the cooperation can continue in a large parameter space.

scholarly journals Supply Chain Contract Choice with Different Behavior Preferences of Retailer

2021 ◽  
Vol 2021 ◽  
pp. 1-9
Author(s):  
Yonglong Wang ◽  
Xinyu Zheng ◽  
Jirong Cai ◽  
Yuelong Zheng
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Demand Uncertainty ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Supply Chain Contract ◽  
Contract Choice ◽  
Revenue Sharing Contract ◽  
Risk Neutral ◽  
Behavioral Preferences

Retailer may exhibit irrationality when facing the risk of demand uncertainty; therefore, we consider four retailer behavioral preferences: risk neutral (RN), waste aversion (WA), stockout aversion (SA), and stockout-waste aversion (SW). The decision-making and contract choice of upstream and downstream enterprises in cases where demand depends on supplier’s effort are studied. The results show that if the retailer has only SA or RN preferences, then the supplier prefers to choose a wholesale price contract, while the retailer does the opposite, if the retailer has only WA, then the supplier prefers to choose a revenue sharing contract, but the retailer’s contract choice depends on the degree of waste aversion, and if the retailer has SW, then the contract choice of upstream and downstream enterprises is related to the degree of waste aversion and stockout aversion.

Revenue Sharing Contract of Green Supply Chain under Manufacturer Risk-Aversion

2014 ◽  
Vol 697 ◽  
pp. 482-487
Author(s):  
Shi Ying Jiang ◽  
Chun Yan Ma
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Risk Aversion ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Game Model ◽  
Product Price ◽  
Revenue Sharing Contract

Background on two stages green supply chain consisting of a manufacturer and a retailer, considering the degree of risk aversion and product greenness, consumer preferences and other factors, the centralized decision-making game model and manufacturer-leading Stackelberg game model are established.Then two game models are compared. The interaction of product greenness, wholesale price, product price,and risk aversion utility for manufacturers and retailers are also disscussed. Finally, the revenue sharing contract is applied to coordinate the green supply chain . The results show that:(1) In the centralized decision-making model, there is a critical value of the product green degree; (2)In manufacturer-leading Stackelberg game model, the higher the green degree of the product, the higher the manufacturer's wholesale price,and the wholesale price increases as risk aversion degree of manufacturers improves;(3)The revenue sharing contract can coordinate this type of green supply chain under manufacturers risk-averse.

scholarly journals Supply chain contracting coordination for fresh products with fresh-keeping effort

2017 ◽  
Vol 117 (3) ◽  
pp. 538-559 ◽  
Author(s):  
Qi Zheng ◽  
Petros Ieromonachou ◽  
Tijun Fan ◽  
Li Zhou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Optimal Decision ◽  
Decision Variable ◽  
Coordination Problem ◽  
Content Type ◽  
Revenue Sharing Contract ◽  
Decentralized Decision Making

Purpose Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the contract between retailer and supplier. The optimized prices for the retailer and the supplier, taking the fresh-keeping effort into consideration, are derived. Design/methodology/approach To address this issue, the authors consider a two-echelon supply chain consisting of a retailer and a supplier (i.e. wholesaler) for two scenarios: centralized and decentralized decision making. The authors start from investigating the optimal decision in the centralized supply chain and then comparing the results with those of the decentralized decision. Meanwhile, a fresh-keeping cost-sharing contract and a fresh-keeping cost- and revenue-sharing contract are designed. Numerical examples are provided, and managerial insights are discussed at the end. Findings The results show that the centralized decision is more profitable than the decentralized decision; a fresh product supply chain (FPSC) can only be coordinated through a fresh-keeping cost- and revenue-sharing contract; the optimal retail price, wholesale price and fresh-keeping effort can all be achieved; and the profit of a FPSC is positively related to consumers’ sensitivity to freshness and negatively correlated with their sensitivity to price. Research limitations/implications This research is based on the assumption that demand is relatively stable. It has not addressed when demand is stochastic. Practical implications The findings would be useful for managers in fresh food sector in terms of how to deal with suppliers in order to maximize total profit while also provide freshest food to the customers. Originality/value Few studies have considered fresh-keeping effort as a decision variable in the modelling of supply chain. In this paper, a mathematical model for the fresh-keeping effort and for price decisions in a supply chain is developed. In particular, fresh-keeping cost-sharing contract and revenue-sharing contract are examined simultaneously in the study of the supply chain coordination problem.

scholarly journals Optimal Decisions for Adoption of Item-Level RFID in a Retail Supply Chain with Inventory Shrinkage under CVaR Criterion

2016 ◽  
Vol 2016 ◽  
pp. 1-17
Author(s):  
Chunming Xu ◽  
Daozhi Zhao
Keyword(s):  
Supply Chain ◽  
Recovery Rate ◽  
Value At Risk ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Conditional Value At Risk ◽  
Decentralized System ◽  
Revenue Sharing Contract ◽  
Item Level ◽  
Inventory Shrinkage

This paper investigates the effect of item-level RFID on inventory shrinkage in the retail supply chain, which consists of a risk-neutral manufacturer and a risk-averse retailer. Under conditional value-at-risk (CVaR) criterion, two different supply chain settings are discussed as follows. In the centralized setting, we develop the models in both RFID case and no RFID case, respectively. Comparisons between the two cases are made. In particular, a sufficient condition is given to judge whether to adopt item-level RFID. In the decentralized setting, we focus on discussing two different contract types including wholesale price contact and revenue sharing contract. Finally, number examples and sensitivity analysis are given to illustrate the proposed models. The results show that, for the centralized system, the sales-available rate, the recovery rate, and the tag cost are mainly the driving factors in evaluating the benefit of an item-level RFID. In particular, when the sales-available rate and the tag cost are quite small and the recovery rate is higher, the supply chain partners’ profits obtained by investment for RFID are improved significantly. For the decentralized system, under revenue sharing contract, Pareto improving outcome and coaffording risk can be achieved if the retailer sets an appropriate parameter for the manufacturer.

Research of Revenue Sharing Contract Model under the Linear Quality-Demand in Supply Chain

2010 ◽  
Vol 39 ◽  
pp. 120-125
Author(s):  
Jun Hu
Keyword(s):  
Supply Chain ◽  
Quality Management ◽  
Linear Correlation ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Revenue Sharing Contract ◽  
Decision Variables

As quality management being of great importance on many companies increasingly, quality coordination has become the new one of supply chain coordination. When demand is in the linear correlation with quality in supply chain member, the traditional wholesale price has not coordinated the supply chain. In this paper, the revenue sharing contract is put forward under the linear quality demand and the coordination can be achieved through it. Also the decision variables such as price, quantity and quality are obtained.

scholarly journals Coordinating contracts as an instrument of supply chain profit maximization under short-term financing necessity

2020 ◽  
Vol 13 ◽  
pp. 57-94
Author(s):  
Irina Berezinets ◽  
◽  
Tatyana Voronova ◽  
Nikolay Zenkevich ◽  
Natalia Nikolchenko ◽  
...  
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Wholesale Price ◽  
Profit Maximization ◽  
Revenue Sharing ◽  
Expected Profit ◽  
Short Term ◽  
Bank Financing ◽  
Revenue Sharing Contract ◽  
Credit Financing

In this paper the problem of the supply chain expected profit maximization under the assumption of the short-term financing necessity for one of the supply chain parties using a coordinating contract is considered. The solution is derived for a two-echelon supply chain under the assumption of product demand being distributed as uniformly. A revenue-sharing contract with bank financing and a modified revenue-sharing contract with trade credit financing are explored. It is stated that none of the studied contracts is coordinating, as they do not provide the supplier’s expected profit maximum. The conditional coordination of supply chain with a modified revenue-sharing contract with trade credit financing is considered if the supply chain and the retailer’s expected profit maximum are reached and the supplier’s expected profit is greater than in case of application of a modified wholesale price contract with trade credit financing and a revenue-sharing contract with bank financing. It is proved that it is beneficial for both supply chain parties and the problem of the supply chain expected profit maximization under the assumption of the short-term financing necessity for one of the supply chain parties can be solved using a modified revenue-sharing contract with trade credit financing.

scholarly journals Contracting Fashion Products Supply Chains When Demand Is Dependent on Price and Sales Effort

2015 ◽  
Vol 2015 ◽  
pp. 1-7 ◽  
Author(s):  
Ying Wei ◽  
Liyang Xiong
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Two Stage ◽  
Effort Level ◽  
Optimal Decisions ◽  
Fashion Products ◽  
Revenue Sharing Contract ◽  
Investment Level

This paper investigates optimal decisions in a two-stage fashion product supply chain under two specified contracts: revenue-sharing contract and wholesale price contract, where demand is dependent on retailing price and sales effort level. Optimal decisions and related profits are analyzed and further compared among the cases where the effort investment fee is determined and undertaken either by the retailer or the manufacturer. Results reveal that if the retailer determines the effort investment level, she would be better off under the wholesale price contract and would invest more effort. However, if the manufacturer determines the effort level, he prefers to the revenue-sharing contract most likely if both parties agree on consignment.

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