Revenue Sharing in Dairy Industry Supply Chain-A Case Study of Hohhot,China

Dairy industry has become an increasingly important enterprise in China as people＇s dietary preferences and composition have changed dramatically with rapid economic development in the past several decades.A number of problems,however,exist in China＇s relatively young dairy industry,including the imbalanced allocation of profits throughout the dairy supply chain.One of the root causes of the melamine infant powered milk scandal in 2008 was the unfair profit allocation mechanism in dairy supply chain.The revenue sharing contract approach has proven to be effective in generating market shares and total profits.In this study,we apply the three-stage revenue sharing contract model of Giannoccaro and Pontrandolfo（2004） in an analysis of dairy supply chain to explore its problems in profit allocation and possible solutions to them.The analysis was conducted by a case study of Hohhot,often called as ＂milk capital of China＂.Our results show that the current profit distribution in the dairy supply chain is not balanced：the supermarket＇s profitfarmer＇s profitmanufacturer＇s profit.Under the revenue sharing contract setting,the dairy industry＇s total profit increased by 12.49%.By exploring different parameters in the revenue sharing contract model,we have found that a win-win situation can be created among all the members of the supply chain.In dairy supply chain,the ratio of the revenue reserved for the supermarket itself is equal or greater than 47% and the ratio of the revenue reserved for the manufacturer itself is between 46.4 and 50.2%.The values of the parameters that generate a sustainable or win-win situation are related to the bargaining position in the dairy supply chain.The revenue sharing contract has proven to be effective and desirable by all the dairy chain partners in dairy supply chain.The results of this study provide relevant information for improving the dairy supply chain structure and the revenue sharing contract model can be applied to other industries,sectors and regions.

Supply Chain Network Equilibrium with Revenue Sharing Contract under Demand Disruptions

Contract is a common and effective mechanism for supply chain coordination,which has been studied extensively in recent years.For a supply chain network model,contracts can be used to coordinate it because it is too ideal to obtain the network equilibrium state in practical market competition.In order to achieve equilibrium,we introduce revenue sharing contract into a supply chain network equilibrium model with random demand in this paper.Then,we investigate the influence on this network equilibrium state from demand disruptions caused by unexpected emergencies.When demand disruptions happen,the supply chain network equilibrium state will be broken and change to a new one,so the decision makers need to adjust the contract parameters to achieve the new coordinated state through bargaining.Finally,a numerical example with a sudden demand increase as a result of emergent event is provided for illustrative purposes.

DISPOSING THE LEFTOVERS UNDER THE CONSIGNMENT CONTRACT WITH REVENUE SHARING:RETAILER VS SUPPLIER

This paper studies the consignment contract with revenue sharing where the retailer offers two revenue share schemes between himself and his supplier from the viewpoint of inventory ownership: One is that the retailer takes charge of the unsold items,the other one is that the retailer returns the unsold items to the supplier at the end of the selling period,and the supplier disposes those overstockings.In each contract,the retailer deducts a percentage from the selling price for each sold item and transfers the balance to the supplier.The supplier solves a two-stage problem:She first chooses contract,then decides retail price and delivery quantity according to the terms of the contract chosen.With an iso-price-elastic demand model,the authors derive the retailer and suppliers’ optimal decisions for both schemes.In addition,the authors characterize how they are affected by disposing cost.The authors compare the decisions between the two schemes for disposing cost turn out to be holding cost or salvage value,respectively.The authors use numerical examples to show the supplier’s first-stage optimal decision depends critically on demand price elasticity,the disposing cost and the retailer’s share for channel cost.

Collaborative adoption of blockchain technology: A supply chain contract perspective

The outbreak of COVID-19 has significantly affected the development of enterprises.In the post-pandemic era,blockchain technology has become one of the important technologies to help enterprises quickly gain market competitiveness.The heavy investment required of supply chain stakeholders to employ blockchain technology has hindered its adoption and application.To tackle this issue,this study aims to facilitate the adoption of blockchain technology in a supply chain consisting of a core enterprise and a small/medium-sized enterprise through an effective supply chain contract.We analyze the performance of a cost-sharing(CS)contract and a revenue-sharing(RS)contract and propose a new hybrid CS-RS contract for better performance.We conduct comparative analyses of the three contracts and find that the hybrid CS-RS contract can more effectively incentivize both parties to reach the highest level of blockchain technology adoption and achieve supply chain coordination.

COORDINATING A TWO-ECHELON SUPPLY CHAIN THROUGH DIFFERENT CONTRACTS UNDER PRICE AND PROMOTIONAL EFFORT-DEPENDENT DEMAND

Retail price and promotional effort are two important parameters on which demand of a commodity largely depends. This paper develops and analyzes a two-echelon supply chain where market demand depends on both retail price and sales effort. The centralized model is studied as the benchmark case, and the wholesale price-only contract is studied as the base case in which each entity tries to maximize its individual profit. Different contract mechanisms are implemented to outperform the base case in terms of both total chain＇s as well as individual profits. Comparisons among the coordinating contracts are provided so that any entity may choose the better one from available contracts after the contract parameters are negotiated. The model is extensively examined through a numerical example.

SUPPLY CHAIN DECISION-MAKING AND COORDINATION UNDER PRICE-DEPENDENT DEMAND

This paper studies the decision-making and coordination of supply chain （SC） considering the effect of price-dependent demand. By assuming demand decreases as the price increases, we analyse the impacts of the dependence on the SC in three different models： decentralized without coordination, centralized coordination and decentralized with coordination by revenue sharing contract. The existence of the best solution in the different models is proved, and the performance of revenue sharing coordination SC is similar to the centralized one. We find that the more evidently the price affects the demand, the more revenue sharing contract improves the performance of SC. The dependence affects the decision-making and the parameter setting of revenue sharing contract is also found.

Optimal Sales Promotion in a Supply Chain Using Consignment Contract under Stochastic Demand

Sales promotion is getting more and more prosperous in Chinese cross-border e-commerce platforms where the demand is uncertain.However,most existing literature on promotion strategies is focusing on deterministic demand.In this paper,we propose a game-theoretical model under multiplicative stochastic demand to investigate the pricing,inventory quantity and sales promotion strategies for a supply chain which is consisted of one cross-border distributor and one capital-constrained retailer under a consignment contract.We obtain the equilibrium outcomes under stochastic demand,and find that the optimal price and promotion investment depend on demand uncertainty under endogenous inventory decisions.With exogenous unlimited inventory,the retailer prefers owing promotion right when the elasticity of price and promotion is small enough and its capital is sufficient,while the distributor always prefers to control sales promotion.With endogenous inventory quantity,the sensitivity of demand to price is influence by the demand uncertainty.The retailer prefers to decide the promotion when the price-elasticity is small,while the distributor prefers to decide the promotion under large promotion-elasticity.And the intensity of optimal sales promotion made by retailers may be stronger than that when the distributor owns the promotion right,which depends on the elasticity of price and promotion.More importantly,it is always better for consumers when the distributor reserves the promotion right as a lower optimal retailing price is offered.