A Stackeberg Game of Profit Division in a Two-Stage Supply Chain with Interdependent Firms of Information Asymmetry

This paper tries to analyze the issue of benefit coordination in a two-stage Supply chain (SC) which has a manufacture and a retailer. The manufacturer stays on the upstream of the SC, and only has some information advantage, which is his marginal cost and holding cost. This paper also takes the factors, which affect both sides' decisions such as the demands, the unit holding cost, the fixed cost, the unit purchase order cost and the clearance price, into consideration. The Stackelberg model is firstly built up and the optimal order quantity which can coordinate the benefit of both sides is then calculated. The author discusses how the manufacturer maximizes his profit under the framework of revenue-sharing contract and the established profit distributive function and gets the solution of the optimal strategies. In addition, the united strategies of the manufacturer and retailer are analyzed here, on the basis of which core conditions to reach the entire optimization of the SC are illustrated in this paper. Finally, the solution of the supply chain game model is gotten. Apart from that, the degree in which each factor affects the decision of both sides is probed into.