Coordination Contracts for Competitive Two Echelon Supply Chain With Price-and-Promotional Effort Dependent Demand

Zhihong WU


With the deepening of globalization,improve the market share is becoming more and more important,to many enterprises promotional effort is a good choice.Based on price-and-promotional effort dependent demand,we developed a model consists of a dominant manufacture and two retailers,and compared the optimal strategies under the centralized and decentralized scenarios. To coordinate the supply chain and improve the profits of the members of the supply chain, two coordination contracts are proposed, we find that these contracts improved profits of both sides. Finally we validated the effectiveness of these contracts through numerical examples.


Promotion effort; Price; Demand; Supply chain coordination

Full Text:



He, Y., Zhao, X., Zhao, L., & He, J. (2009). Coordinating a supply chain with effort and price dependent stochastic demand. Applied Mathematical Modelling, 33, 2777-


Huang, Z., & Li, S. X. (2001). Co-op advertising models in manufacturer retailer supply chains: A game theory approach. European Journal of Operational Research, 135(3), 527-544.

Huang, Z., Li, S. X., & Mahajan, V. (2002). An analysis of manufacturerretailer supply chain coordination in cooperative advertising. Decision Sciences, 33(3), 469-494.

Krishnan, H., Kapuscinski, R., & Butz, D. A. (2004). Coordinating contracts for decentralized supply chains with retailer promotional effort. Management Science, 50(1), 48-63.

Li, S. X., Huang, Z., & Zhu, J. (2002). Cooperative advertising game theory and manufacturer-retailer supply chains. Omega, 30(5), 347-357.

Tsao, Y. C. (2010). Managing multi-echelon multi-item channels with trade allowances under credit period. International Journal of Production Economics, 127, 226-237.

Wang, S. D., Zhou, Y. W., Min, J., & Zhong, Y. G. (2011). Coordination of cooperative advertising models in a one-manufacturer two-retailer supply chain system. Computers & IndustrialEngineering, 6, 1053-1071.

Xie, J., & Wei, J. C. (2009). Coordinating advertising and pricing in a manufacturer retailer channel. European Journal of Operational Research, 197, 785-791.

Yang, S. L., & Zhou, Y. W. (2006). Two-echelon supply chain models: Considering duopolistic retailers’ different competitive behaviors. Int. J. Production Economics, 103, 104-116.



  • There are currently no refbacks.

Copyright (c) 2016 Management Science and Engineering

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.

We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in Management Science and Engineering are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address:1055 Rue Lucien-L'Allier, Unit #772, Montreal, QC H3G 3C4, Canada.

Telephone: 1-514-558 6138
Http:// Http://

Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures