The Study of Supply Chain Network Equilibrium Model with Contracts

In this paper, we analyze and establish a supply chain network equilibrium model with random demands and goodwill penalty cost. It is pointed that the profit allocation between the manufacturers and retailers is unchangeable when supply chain network is equilibrium, and the equilibrium state is too ideal to be in the market economy. In order to be equilibrium, we introduce buy back contract and profit sharing contract into the supply chain network equilibrium model. The manufacturers and retailers determine the contracts parameter through bargaining, so that all of them satisfy with the profit allocation of the supply chain network equilibrium state.