Coordination of Perishable Product Supply Chains with a Joint Contract under Yield and Demand Uncertainty

Abstract

With the complex and changeable environment, the demand and yield in the perishable products supply chain are usually uncertain. This paper studies a joint contract that combines revenue sharing with quantity discount to coordinate the supply chain under demand and yield uncertainty, which consists of one manufacturer and one retailer. The retailer pays the manufacturer a down payment at the beginning, and the manufacturer gives the retailer a quantity discount and shares a proportion of profit from the retailer at last. To make sure that both members in the supply chain want to adopt this contract, we prove the feasibility of the joint contract achieving a win–win situation. In addition, we investigate how the price in the secondary market influence the contract, and the conclusion further proves that supply chain coordination is actually a process of re-sharing risks among all nodes of the supply chain. However, the joint contract in this paper has certain adaptability to such risks. Finally, numerical analysis is given to show the impacts of uncertainties on the profit of the supply chain, the decisions made by the members, and the effectiveness of our joint contract.