Supply chain coordination with contracts under different channel power structures

Abstract

This study discusses a single manufacturer single retailer channel to compare whether it is beneficial to use a revenue sharing contract under manufacturer-dominated and retailer-dominated scenarios. Then the scope is extended to cover duopolistic manufacturers and a common retailer channel, and a common manufacturer and duopolistic retailers channel to exam whether it is beneficial to use a revenue sharing contract under a manufacturer-dominated or a retailer-dominated scenario. The study goes on to cover optimal pricing and ordering polices for a duopolistic manufacturers and duopolistic retailers channel with revenue sharing contract. We also discuss whether the ABD program should be launched under different scenarios. Finally we derive optimal pricing and ordering polices for the general n manufacturers and n retailers channel under different scenarios. We also discuss special market channels within n manufacturers and n retailers channel to obtain the corresponding optimal pricing and ordering polices. Moreover, we construct a two-period model to discuss pricing and ordering problems for a dominant retailer with demand uncertainty in a declining price environment. We show that the maximum expected profit function is continuous concave, so the optimal solution to pricing and ordering policy exists, and it is the one and only.