Coordinating Supply Chain with Demand Disruption by Quantity Flexibility Contract

Supply chain coordination under forced compliance could be achieved with a quantity flexibility contract. But, if a demand disruption happened before the selling season, the coordination may be broken off. In this paper, the impact of the demand disruption to the supply chain is investigated, then an adjusted quantity flexibility contract is designed to coordinate the supply chain with demand disruption. By setting the wholesale price of the quantity flexibility contract according to order quantity and stochastic demand properly, channel coordination is achieved whether there is demand disruption or not.