Combine Contract Model for Two-level Supply Chain Considering Nash Bargaining Fairness Concerns and Sales Effort

Abstract

In the present scenarios of globalization, product life-cycle has become shorter and more frequent. of the Supply chain members’ behavior will affect effectiveness and revenue of supply chain. In our study, the fairness preference was introduced into the model for two-level supply chain with stochastic demand depending on promotional effort. Firstly, we find the condition that is able to achieve channel coordination. Then we design a combined contract with the buyback and sales reward and penalty contract to solve the problem. We find that the supply chain can be coordinated with the combine contract properly designed. Finally, we use a numerical example to reveal the effectiveness of the combine contract and gain more insights.