Supply Chain Coordination Under Ramp-Type Price and Effort Induced Demand Considering Revenue Sharing Contract

In this paper, a revenue sharing contract is designed to coordinate a distribution channel where the demand of the product is ramp-type price and effort sensitive. It is shown that traditional revenue sharing contract does not coordinate the system. As an alternative, two new mechanisms are proposed (i) revenue sharing with coordinated effort of the retailer alone and (ii) both revenue and effort sharing contract. In addition, a crucial modification of revenue sharing fraction is also proposed. To enhance the applicability of revenue sharing contract, the contract parameters are determined by using bi-level multi-objective fuzzy goal programming technique where manufacturer sets the wholesale price greater than the marginal cost. Numerical examples are presented to illustrate all the models.