A Comparison with the Price-Only, Buy-Back, Revenue Sharing Contracts in a Manufacturing-Retailer Channel for a Single-Period Product

摘要

This study examines the performance of three kinds of contracts, i.e., price-only contract, buy-back contract and revenue-sharing contract. Under the classical newsvendor-problem framework, we first model three contracts with a simple marketing channel consisting of one supplier and one retailer. Next, we numerically solve the problems with a game theory method, that is, the manufacturer as a Stackelberg leader designs the contract parameters and the retailer as a follower in response to the manufacturer’s contract parameters makes herself decisions. The results of this study demonstrate that the revenue-sharing contract is not only favorable for the manufacturer and but also as one kind of channel coordination mechanism has the highest channel efficiency among three contracts. However, revenue sharing contract coercively destroys the retailer’s benefits. With a fixed sharing proportion, retailer’s benefits can be improved with loss of the channel efficiency.