Quality Control and Coordination Mechanism in Supply Chain Based on Revenue Sharing Contract

It this paper,coordination of revenue sharing contract for quality control decision of members is studied in supply chain that consists of one supplier and one retailer.Equilibrium is analyzed in three different scenarios which include using revenue sharing contract,cooperation,and using wholesale price contract.Strength and limitation of revenue sharing contract for supply chain quality control are discussed.It shows that when the change of demand is sensitive to product quality improvement,revenue sharing contract can get better effect of coordination.Unfortunately,though retailer gets higher profit than using wholesale price contract,the share of profit decreases,which means that revenue sharing contract is more favorable for supplier.