Supply chain management with revenue-sharing contract in a JIT setting

Abstract

This paper investigates supply chain management between the retailer and the supplier with revenue-sharing contract under uncertain demand by means of a single-period order within a Just-In-Time setting. And we also show how to effectively handle the demand uncertainty in a supply chain, both for the case of a centralized-decision-making system and the case of decentralized-decision- making system. The aim of the paper is to find the optimal order from the retailer in both systems in order that the total expected profits are maximal. The paper focuses not only on the overall performance but also on the allocation of the profit between the retailer and the supplier. © 2009 Springer Berlin Heidelberg.