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Proceedings of the 22nd International Conference on Industrial Engineering and Engineering Management 2015 pp 449–463Cite as

On the Coordination of Supply Chain with Demand Uncertainty Under the Combination of the Wholesale Price Contract and Option Contract

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Abstract

In this paper, we studied the coordination of the supply chain consisting of one retailer and one supplier, where the market demand is uncertain. The combination of the Wholesale Price Contract and Option Contract is used to solve the problem that market risk is borne independently by the supplier. The theoretical analysis shows that the strategy can share the risk between members of the supply chain, i.e., the supplier’s risk reduced, and the supply chain system profit can be rationally distributed, the supply chain can be coordinated and a win-win situation can be achieved by choosing appropriate option price. Finally, the numerical examples were given to verify this conclusion.

Keywords

  • Option contract
  • Supply chain coordination
  • Wholesale price
  • Win-win

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Authors and Affiliations

  1. College of Mathematics and Information Sciences, Guangxi University, Nanning, 530004, China

    Tian-yuan Liu, Jiang-tao Mo & Si-yao Tang

Authors
  1. Tian-yuan Liu
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  2. Jiang-tao Mo
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  3. Si-yao Tang
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Corresponding author

Correspondence to Tian-yuan Liu .

Editor information

Editors and Affiliations

  1. Tianjin University, Tianjin, China

    Ershi Qi

  2. Tianjin University, Tianjin, China

    Jiang Shen

  3. Tianjin University, Tianjin, China

    Runliang Dou

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Liu, Ty., Mo, Jt., Tang, Sy. (2016). On the Coordination of Supply Chain with Demand Uncertainty Under the Combination of the Wholesale Price Contract and Option Contract. In: Qi, E., Shen, J., Dou, R. (eds) Proceedings of the 22nd International Conference on Industrial Engineering and Engineering Management 2015. Atlantis Press, Paris. https://doi.org/10.2991/978-94-6239-180-2_44

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  • DOI: https://doi.org/10.2991/978-94-6239-180-2_44

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