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| International Supply Chain Contract with Quantity Discounts Taking Exchange
Rate Changing and Transportation Cost Sharing into Account
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| ZHAO Zheng-Jia |
| Southwest Jiaotong University, Chengdu, China |
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Abstract The model of international supply chain contract with quantity discounts is proposed. In the model, exchange rate and sharing rate of international transportation cost are taken into account. The optimal contract with quantity discounts to coordinate the international supply chain is obtained. With the contract, the profits of the supplier and the profits of the seller as well as that of the whole supply chain are improved. The model and propositions are validated by an example. Impacts on parameters of the contract and the profits of the supplier, the profits of the seller as well as that of the whole supply chain are analyzed. The results show that: ① the rate of quantity discount and the sharing rate of international transportation cost, which are two of the contract parameters, are stable with exchanging rate, however the order quantity changes sensitively; ② with the value of RMB rising against the dollar, not only the profits of the Chinese supplier decline, but also the profits of the American seller and that of the whole supply chain decease even through the supply chain is coordinated by the contact. According to these results, from the perspective of supply chain management, the exchange rate of Chinese RMB against US dollar should remain stable
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Received: 24 February 2010
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2012, Vol. 9 
