Abstract:

In the face of the continuously growing demand for customization， many enterprises are focusing on assembling components， outsourcing high-cost production tasks to specialized original equipment manufacturers， who are responsible for procuring the corresponding raw materials. However， influenced by various factors such as the unstable international political situation and the recurring outbreaks of the COVID-19 pandemic， prices of certain raw materials fluctuate frequently， directly impacting the prices and demand for the final products. Against this backdrop， a two-tier supply chain composed of a retailer （i.e.， assembly enterprise） and a supplier （i.e.， original equipment manufacturer） is considered. Geometric Brownian Motion （GBM） is introduced to depict the volatility in procurement prices. A joint procurement quantity and procurement timing decision model， based on the fluctuation of procurement prices， is established， using centralized decision-making as a benchmark. Two novel contracts are designed： the time-dependent wholesale price contract （TWP） and the time-dependent revenue-sharing contract （TRS）. Unlike traditional wholesale price contracts （WP） and revenue-sharing contracts （RS）， TWP and TRS contracts fully take into account the retailer's procurement time. Research results indicate that the TWP contract fails to achieve supply chain coordination， while the TRS contract can coordinate the supply chain under specific conditions. Further research results suggest that in the TRS contract， the wholesale price factor and revenue allocation ratio are closely related to the retailer's ordering time. By comparing TWP and TRS contracts， it is found that when the product selling price is relatively high and the procurement price is trending upward （or downward）， retailers tend to place orders later （or earlier） under the TRS contract. Finally， through numerical analysis of the profits of suppliers and retailers under TRS and TWP contracts， it is discovered that retailers and suppliers can achieve both Kaldor-Hicks and Pareto improvements under the TRS contract. It enriches the theoretical framework of supply chain coordination mechanisms and is beneficial for supply chain enterprises to establish more self-interested and mutually beneficial relationships in a complex and dynamic market environment.

Key words: supply chain coordination mechanism, fluctuation in procurement prices, geometric brownian motion, time-dependent wholesale price contracts, time-dependent revenue sharing contracts