Decision and coordination mechanism in supply chain based on user innovation

To analyze the impact of user innovation on the optimal decision supply chain, based on identifying the demand of lead users with utility function of consumers, the centralized decision-making model, decentralized decision-making model and revenue-sharing contract supply chain model were constructed, and Stackelberg game method was used for solving to obtain the optimal pricing strategy, demand of lead users and contract parameter range of manufacturer and retailer in equilibrium. Through numerical simulation, the profit, price and demand of the supply chain and its members under the decentralized decision-making model with revenue sharing contract were compared. The results showed that the revenue sharing contract could effectively coordinate the supply chain and increase the profit of supply chain compared with the decentralized decision-making model. The increase of consumer innovation subsidy did not significantly stimulate the demand of lead users, but an optimal innovation subsidy that maximized the profit was existed. When the consumer innovation subsidy was fixed and the manufacturer's technology absorptive capacity was from low to high, the relationship between consumer knowledge level and wholesale price or retail price changes from positive correlation to negative correlation. The stronger the technology absorptive capacity was, the more sensitive the wholesale price of decentralized model or the retail price of contract with growing level of consumer knowledge. The level of consumer knowledge of two models had a positive impact on the demand of lead users, supply chain members and its overall profits. When the manufacturer's technology absorptive capacity was low, it tended to use revenue-sharing contract to increase the overall profit of supply chain and the technological absorptive capacity of a manufacturer played a decisive role in its profits. © 2020, Editorial Department of CIMS. All right reserved.