Contracting in a dual-channel supply chain with demand disruption and asymmetric information

This paper explores the contract design problem in a dual-channel supply chain with demand disruption and asymmetric information. Optimization theory and game theory are used to get a contract or a contract menu in this paper. In the situation of information sharing and no information sharing, a contract and a contract menu are designed to maximize the expected profit of the manufacturer, respectively. We find that the production plan of the manufacturer is robust when the demand disruption is small and the sale price in the direct channel is a very useful tool for the manufacturer to react to the demand disruption. ? 2014 ISSN 1881-803X.