Study on Profit Allocation for Cooperative Supply Chains Based on Demand-Price Elasticity

Supply chain management is an increasingly important content of enterprise's strategic management, and the coordination of the supply chain is becoming the core factor of supply chain management, which is decided by the profit allocation among the nodes of it. While the profit distribution proportions of different sorts of products are poles apart, this paper studies the problem of profit allocation between the manufacture and the seller based on demand - price elasticity. It is concluded that the supply chain will keep stabilization when the profit is allocated according to a fixed ratio and the ratio is a function of elasticity coefficient.