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

In: Supply Chain Coordination under Uncertainty

Author

Listed:
  • Jing Hou

    (Hohai University)

  • Amy Z. Zeng

    (Worcester Polytechnic Institute)

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.

Suggested Citation

  • Jing Hou & Amy Z. Zeng, 2011. "Bargaining in a Two-Stage Supply Chain Through Revenue-Sharing Contract," International Handbooks on Information Systems, in: Tsan-Ming Choi & T.C. Edwin Cheng (ed.), Supply Chain Coordination under Uncertainty, pages 347-378, Springer.
  • Handle: RePEc:spr:ihichp:978-3-642-19257-9_14
    DOI: 10.1007/978-3-642-19257-9_14
    as

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