Combined Contract Model for Aquatic Processing Product Supply Chain with Effort Dependent Stochastic Demand

Coordination of aquatic processing product supply chain is very important to reduce deterioration for business enterprises. In factual conditions, the promotional effort is one of the most important factors which influence the market demand. This paper considers the issue of coordination for three-level supply chain consisting of one product supplier, one distributor and one retailer who faces the stochastic demand depending on the promotional effort. Firstly, the paper gives the condition which can make the supply chain coordinate and analyze the reason why single buyback contract can't coordinate the supply chain in that case. Then the author designs a combined contract with the buyback and sales reward and penalty contract to solve the problem. We find that the supply chain can be coordinated with the combined contract properly designed. Finally, get the parameter numerical simulation analysis and reveal the effectiveness of the combined contract.