A contract model for multi-echelon supply chain based on revenue sharing and quantity discount

In this paper, we propose a supply chain contract based on revenue sharing and a quantity discount considering price and service level. This contract allows system efficiency in a centralized fashion (coordination) to be achieved and improves the profits of all the supply chain players (win-win) by tuning the trade parameters between the parties. The proposed supply chain contract also induces the most downstream entity to purchase its order quantity at a reduced wholesale price. �� 2012 International Information Institute