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Bargaining in a Two-Stage Supply Chain Through Revenue-Sharing Contract

  • Jing Hou
  • Amy Z. Zeng
Chapter
Part of the International Handbooks on Information Systems book series (INFOSYS)

Abstract

We focus on a bargaining problem between one supplier and one retailer that are coordinated by a revenue-sharing contract. The suppler is assumed to have the ability to influence the retailer’s profit by setting his/her target inventory level, which in turn determines the lead time. We examine the cases under which either the supplier or the retailer is dominant in the bargaining process. The key contract parameter, the acceptable range of the revenue-sharing fraction for the two players, and the maximum amount of monetary bargain space are obtained under explicit and implicit information, respectively. Numerical illustrations of the contracts for various scenarios are given to shed more insights.

Keywords

Dominance and bargaining Nonlinear optimization Supply chain coordination Supply contracts 

Notes

Acknowledgment

This work is partially supported by the Scientific Research Foundation of Graduate School of Southeast University (YBJJ1003). We are also thankful for the helpful suggestions provided by the anonymous referees.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Business SchoolHohai UniversityNanjingChina
  2. 2.School of BusinessWorcester Polytechnic InstituteWorcesterUSA

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