The Model of Revenue-Sharing Contract Between Competing Retailers With Sales Promotions

Abstract

This study proposes an integrated revenue-sharing contract for supply chain coordination to achieve the maximum profits for the entire supply chain as well as for the individual members of the chain and also examines the optimal number of periods for which the retailers should carry out sales promotions It uses the Markov transition matrix and diffusion theory to simulate consumer behavior Three scenarios are examined in this work as follows The first is used to examine whether the supply chain should alter its revenue-sharing contract which is used for supply chain coordination when changes in demand occur in the market The second examines the changes in profits when retailers do not carry out sales promotions in a competitive market with two retailers Finally the third scenario investigates the changes in profits when retailers hold sales promotions in a competitive market with only two retailers Based on the results this work we find the optimal retail price wholesale price and order quantity needed to obtain the maximum profits for the entire supply chain and the optimal number of periods for which the retailers should hold sales promotions

Date of Award	2014 Jul 5
Original language	English
Supervisor	Chinho Lin (Supervisor)