Repeating Contract Research on Nonperishable Product with Random Demand

A two-stage supply chain consists of a manufacturer and a retailer. Manufacture acquire demand information through EDI. This make it possible for upstream enterprise to manage inventory and determine output. If supply chain member keep repeating trade relationship, the long-term supply chain performance can be improved through signing a wholesale price contract .Study contract coordination problem when supply chain sell a nonperishable product to end customers. The efficient or optimal output quantity can be achieved through introducing penalty contract.