How to Coordinate Supply Chain Under O2O Business Model When Demand Deviation Happens

In this paper, a supply chain consisting of one supplier and multiple O2O retailers is studied. The supply chain is coordinated under the revenue-sharing contract in the static case. Disruptions make the price sensitivity coefficient change after the production plan is formulated. In centralized supply chain, the supplier only needs to adjust the retail price if the disruption is in a certain range. When the disruption is large enough, what the supplier needs to do is adjust the retail price and the production quantities. In decentralized decision, the supply chain cannot be coordinated. This means that the original revenue-sharing contract cannot coordinate the disrupted supply chain. An improved revenue-sharing contract is used to coordinate the disrupted supply chain. The research shows that the improved contract can coordinate the original supply chain and the disrupted supply chain, which means that the contract has robustness when facing demand deviation