1 AIT Asian Institute of Technology

Revenue sharing contract with two-way penalties

AuthorNguyen Phuoc Thien
Call NumberAIT Diss. no.SM-13-10
Subject(s)Revenue sharing

NoteA dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administratiom
PublisherAsian Institute of Technology
Series StatementDissertation ; no. SM-13-10
AbstractIn the last few years, the effect of revenue - sharing mechanism in supply chain coordination has attracted many practitioners and academia. Howe ver, application of penalty clause in revenue sharing contract has received less attention in the existing research works. In this research, a revenue sharing contract under the effect of two - way penalties is examined. We firstly consider a single manufact urer - single retailer supply chain in which the retailer reserve s a commitment level in advance and the manufacturer will then determine the allocated quantity which is the maximum supply quantity so as to maximize his own profit . Due to asymmetric inform ation in the examined supply chain, the manufacturer can find the best decision for his allocated quantity to the retailer while the decision of the retailer on commitment level may not be optimal. Through scenario analysis, the best decisions for both par ties and the circumstances under which the manufacturer may be willing to share information about allocated quantity with the retailer to help reach the optimal decisions for both parties are examined. The conditions at which supply chain coordination can be achieved are also derived for each scenario . The proposed contract is then extended for a supply chain consisting of one manufacturer and multiple retailers in which the capacity of the manufacturer is limited. The optimal allocation decision of the man ufacturer is proved to exist through Lagrange relaxatio n technique. Sensitivity analyse s are then conducted to illustrate the applicability of the proposed contract and to examine how contract parameters affect the manufacturer’s decis i on on allocated quan tities to various retailers.
Year2013
Corresponding Series Added EntryAsian Institute of Technology. Dissertation ; no. SM-13-10
TypeDissertation
SchoolSchool of Management (SOM)
DepartmentOther Field of Studies (No Department)
Academic Program/FoSMaster of Business Administration (MBA) (Publication code=SM)
Chairperson(s)Huynh Trung Luong ;Vatcharapol Sukhotu (Co-Chairperson)
Examination Committee(s)Do Ba Khang ;Sununta Siengthai
Scholarship Donor(s)Dong Thap Education and Training Department, Vietnam
DegreeThesis (Ph.D.) - Asian Institute of Technology, 2013


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