Coordination through revenue sharing contract in an E-commerce supply chain with consumer preference

The decision-making and coordination of an e-commerce supply chain (ECSC) with consumer preferences are studied. In this paper, the ECSC, consisting of a single manufacturer and a single e-commerce platform, is considered, and the optimal decisions are made for two scenarios, namely, decentralized and centralized decision models. Then, a comparative analysis is performed for two models. The coordination mechanism of revenue sharing is proposed based on the decentralization, and finally, a numerical analysis is used to verify the conclusions. The theoretical results show that the e-commerce platform is less profitable than the manufacturer because of its economies of scale. Interestingly, the quality of e-commerce services under decentralized decision is instead the highest, and improving the service level of e-commerce does not always benefit e-commerce platforms. Meanwhile, a revenue sharing contract will reduce the price and profit gap between the manufacturer and the e-commerce platform.

Automated summary

This paper investigates the decision-making and coordination of an e-commerce supply chain (ECSC) with consumer preferences. The optimal decisions are made for decentralized and centralized decision models, and a comparative analysis is performed. A coordination mechanism based on revenue sharing is proposed, and the conclusions are verified through numerical analysis.