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Mathematical Problems in Engineering
Volume 2015, Article ID 812043, 9 pages
http://dx.doi.org/10.1155/2015/812043
Research Article

Supply Chain Coordination Contracts under Double Sided Disruptions Simultaneously

1Department of Economic Management, North China Electrical Power University, Baoding 071000, China
2Department of Industrial Engineering & Management, College of Engineering, Peking University, Haidian District, Beijing 100871, China

Received 3 June 2015; Revised 18 July 2015; Accepted 27 July 2015

Academic Editor: Young Hae Lee

Copyright © 2015 Huan Zhang et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Supply chain coordination models are developed in a two-echelon supply chain with double sided disruptions. In a supply chain system, the supplier may suffer from the product cost disruption and the retailer suffers from the demand disruption simultaneously. The purpose of this study is to design proper supply chain contracts, under which the supply chain with double sided disruption can be coordinated. Firstly, the centralized decision-making models are applied to find the optimal price and quantity under three cases as the baseline. The different cases are divided by the different relationship between the product cost disruption and the demand disruption. Secondly, two different types of contracts are introduced to coordinate the whole supply chain. One is all-unit wholesale quantity discount policy (AQDP) contract, and the other one is capacitated linear pricing policy (CLPP) contract. And it is found out that the gap between the demand disruption and the product cost disruption is the key factor to influence the supply chain coordination. Some numerical examples and sensitivity analysis are given to illustrate the models. The AQDP contracts are listed out under different cases to show how to use it under double sided disruptions.