Article ID: | iaor200513 |
Country: | Netherlands |
Volume: | 89 |
Issue: | 2 |
Start Page Number: | 131 |
End Page Number: | 139 |
Publication Date: | Jan 2004 |
Journal: | International Journal of Production Economics |
Authors: | Pontrandolfo Pierpaolo, Giannoccaro Ilaria |
Keywords: | supply chain |
Supply chain (SC) coordination can be pursued by adopting a centralized or decentralized decision-making approach. The former option occurs when there is a unique decision maker in the SC, the latter when several independent actors make decision at the different SC stages. SC contracts are a useful tool to make the several SC actors of a decentralized setting behave coherently with each other, as if the chain were operated in a centralized fashion. In this paper, we propose a model of an SC contract aimed at coordinating a three-stage SC, which is based on the revenue sharing mechanism. This model allows the system efficiency to be achieved as well as it could improve the profits of all the SC actors, by tuning the contract parameters.