Two-Stage Supply Chain Coordination with Effort Cost Sharing

This paper studies two-stage supply chain coordination issue, we establish a new model of quantity flexibility contract with effort cost sharing. Compared Supply chains with quantity flexibility contract and without quantity flexibility contract, it's proved that the model can coordinate and optimize the whole supply chain. Numerical examples show that the quantity flexibility contract with effort cost sharing makes the supplier and retailer share the market risk and system profit, and achieve Pareto promotion.