Contracting with demand uncertainty under supply chain competition

We examine supply chain contracts for two competing supply chains selling a substitutable product, each consisting of one manufacturer and one retailer. Both manufacturers are Stackelberg leaders and the retailers are followers. Manufacturers in two competing supply chains may choose different contracts, either a wholesale price contract in which the retailer’s demand forecasting information is not shared, or a revenue-sharing contract in which the retailer’s demand forecasting information is shared. Under supply chain competition and demand uncertainty, we identify which contract is more advantageous for each supply chain, and under what circumstances.