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J4  2012, Vol. 9 Issue (12): 1842-    DOI:
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Coordination Contract for a Supply Chain Considering Production Leadtime and Demand Updating
JIAN Huiyun,WANG Guoshun
Central South University, Changsha, China

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Abstract  We consider the coordination of a supply chain with a long production leadtime and demand updating. The manufacturer has to make the production decision when there is limited information about the market demand due to a long leadtime and distributor is allowed to modify his initial ordering decision after observing the forecast update when sales season is coming. We focus on a contract including the wholesale price and the return price which not only extracts the maximal supplychain profit but also satisfy incentive compatibility constrain for the distributor. Contract parameters are designed by using Nash negotiation model so that the contract creates strict Pareto improvement over a simple price contract for both supply chain members.
Key wordslead time      supply chain      information updating      coordination contracts      Nash negotiation model     
Received: 18 March 2011     
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