A new revenue sharing mechanism for coordinating multi-echelon supply chains. (English) Zbl 1193.90047

van der Rhee, Bo; van der Veen, Jack A. A.; Venugopal, V.; Nalla, Vijayender Reddy

Oper. Res. Lett. 38, No. 4, 296-301 (2010); corrigendum ibid. 41, No. 5, 562 (2013).

Summary: A new type of revenue sharing (RS) contract mechanism for multi-echelon supply chains between the most downstream entity and all upstream entities is proposed. The new RS contract is analyzed in the linear supply chain setting facing stochastic demand. Advantages over mechanisms with RS contracts between all pairs of adjacent entities are discussed and demonstrated.

MSC:

90B06	Transportation, logistics and supply chain management
90B50	Management decision making, including multiple objectives

Keywords:

supply chain management; multi-echelon; revenue sharing; coordination; win-win

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