主管:中国科学院
主办:中国优选法统筹法与经济数学研究会
   中国科学院科技战略咨询研究院

   

Supply chain coordination via option contracts with fairness preference and sales effort

  

  • Received:2018-11-28 Revised:2019-04-28 Published:2019-07-22
  • Contact: Jian-Sheng DAI

Abstract: Considering a supply chain system consisting of a fairness-neutral supplier and a fairness-concerned retailer, where the supplier sell newsvendor-like commodities to the retailer, who can exert promotion effort to enhance stochastic market demand of the commodities. This paper constructs an option contract model, and deeply analyses optimal strategies of the retailer and supply chain coordination via option contracts, and characterizes the conditions satisfied by the parameters of the coordination contracts. Firstly, to deeply analyze optimal strategies of the retailer from two perspectives as follows, one is achievable utility of the retailer, and the other supply chain contract design. Three critical conditions are characterized, one of which is related to whether the retailer should order physical goods (whether it should participate in the supply chain), the second is whether the retailer should buy options, and the third is how to prevent the retailer from over-buying options. The supplier either only purchase physical goods, or purchase both options and physical goods, no matter how the contract parameters are designed. There is no likelihood that the retailer purchases only options but not physical commodities.

Key words: supply chain coordination, option contract, fairness preference, sales effort