Author(s)

Hui Wang, Shihong Pang

Corresponding Author

Hui Wang

Abstract

In recent years, the development of the concept of supply chain to be reckoned with, resulting in the problem that the supply chain is not coordination is increasingly attention. The wholesale price contract is a simple way to solve the supply chain coordination. It is by the supplier in the supply chain to determine a wholesale price. Then the supplier tells the wholesale price to retailers, retailers determine his order. This article elaborated on the basis of simple newsboy model, to establish a simple model of the wholesale price contract, and find out the optimal value of centralized decision-making and decentralized decision-making. Through the test, this article analyses the gap of the experimental data and the optimal value, and to find what factors in the wholesale price contract may affect the result of the experiment. It found there is not necessary link between the wholesale price and the retailer's order quantity.

Keywords

wholesale Price Contract, Newsboy Model, Fairness Concerns, Supply Chain Coordination