Quantity flexibility contract with effort and price-dependent demand

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School of Economics and Management, Southeast Univ., Nanjing 210096, China [1 ]
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Contracts - Electronic commerce - Game theory - Probability density function - Systems engineering;
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In view of the fact that an one-supplier one-retailer supply chain faces stochastic effort and price dependent demand, a model of the quantity flexibility contract is established, then the channel rebate and penalty is introduced to solve the problem that just one quantity flexibility contract can not coordinate the supply chain with effort and price-dependent demand. Two problems are addressed: (1) how to coordinate the decentralized supply chain; (2) how to determine the combined effort, price and inventory decision. At last, the new model is employed to analyze the results with numerical examples.
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