Analysis on the Water Supply Chain Model under Revenue-Sharing Contract considering Marketing Effort, Water Purity

Abstract

A two-tier water supply chain including a manufacturer and a retailer under revenue-sharing contract is constructed. And the contribution of the model is that marketing effort and water purity has been considered. First, four models including the centralized model (model B) and decentralized models (models BM, I, and II) are established and analyzed. Second, the Stackelberg game model is used to discuss the pricing strategy of water supply chain members in centralized and decentralized scenarios. The comparison results show that revenue-sharing contract is beneficial to improve the level of product greening, the profit of supply chain members, and the overall profit of the water supply chain compared with model BM. However, it leads to the decrease of retailers’ green marketing efforts and the wholesale price of water. In addition, revenue-sharing contract through bargaining makes bigger influence than revenue-sharing contract. Marketing can stimulate the increase of the green product’s market demand on one hand, and on the other hand, it generates the amount of marketing cost. In this study, the profit is that marketing produces cannot offset the cost that it brings. Thus, it will be important to take some measures to make up the loss that marketing generated.