Coordination mechanism of supply chain including multiple retailers when demand and cost are disrupted

The coordination problem of a supply chain with one supplier and n Bertrand competing retailers was analyzed. It was proved that a revenue sharing contract can be used to coordinate the supply chain under normal environment. But the coordination may be broken off by demand scale and cost disruptions, and the optimal strategies that the centralized decision-making supply chain replied to the disruptions were proposed by solving the Kuhn-Tucker (KT) condition of optimal profit of supply chain system under disruptions. It was further proved that an improved revenue sharing contract can be used to coordinate the decentralized decision-making supply chain when demands and costs were disrupted simultaneously. Finally, a numerical example was presented to illustrate the efficiency of the proposed model.