Research on Coordination of Perishable Products Supply Chain with the Combined Option and Quantity Discount Contract

First of all, on the basis of analyzing the characteristics of perishable products and the advantages of the option in dealing with the risk sharing, the combined option and quantity discount contract was proposed in order to be fit for the perishable products. Secondly the decision models which composed of one supplier and one retailer were established. Thirdly, the coordination of the contract was discussed and some conditions were given and the model was simulated which was based on the decision parameters of optimal quantity discount point, option price, production capacity decision and the optimal purchasing decision of the retailers. At last, the demonstration shows that the improved option contract can coordinate and share the risk and revenue of the perishable products supply chain and get the Pareto optimality.