Coordination of Supply Chain under the Revenue Sharing-Advertising Cost Sharing Contract

Abstract

In this article, we study a two-echelon supply chain with a single manufacturer and a single retailer. In the case of advertising investment affecting the market demand, we use the theory of game theory, and respectively discuss the coordination of general revenue sharing contract and revenue sharing-advertising cost sharing contract. The results show that: the general revenue sharing contract cannot achieve supply chain coordination. However, revenue sharing-advertising cost sharing contract in a specific form can achieve supply chain coordination. And in the appropriate revenue sharing contract parameters, it can also achieve a win-win situation between the two sides.