Customer incentive, demand referral and service cooperation in Internet supply chain

Considering an infomediary provides demand referral service to retailer and incentive rebate to customer in Internet supply chain, a horizontal cooperation model with stochastic demand and rebate cost was established, and then the optimal policies of infomediary and retailer in centralized and decentralized supply chain were analyzed. Moreover, a horizontal cooperation contract based on incentive rebate cost as well as unit referral service price was developed to coordinate the supply chain. The results revealed that the contract contributed to profit optimization of Internet supply chain and effective win-win cooperation.