Using revenue-sharing conract to improve thesupply chain performacne under retailer's competition

This paper investigates a revenue-sharing contract for coordinating a supply chain comprising one manufacturer and two competing retailers. The manufacturer, as a Stackelberg leader, offers a revenue-sharing contract to two competing retailers who face stochastic demand before the selling season. Under the offered contract terms, the competing retailers are to determine the quantities to be ordered from the manufacturer prior to the season and the retail price at which to sell the items during the season. The study finds that the provision of revenue-sharing in the contract can obtain better performance than the price-only based contract.