Supply chain coordination in emergent events using a revenue-sharing contract

Using the fundamental principles governing the effect of a revenue-sharing contract on supply chain coordination, it can be shown that if an emergent event results in a large change in market demand requiring a change in distribution function then the revenue-sharing contract will not coordinate the supply chains. In this paper, a revenue-sharing contract model for a two-stage supply chain consisting of one supplier and one retailer who face stochastic market demand in response to an emergent event is described.