A Revenue Sharing Contract Embedding Corporate Social Responsibility for Coordinating a Two-Tier Supply Chain

Che-Fu Hsueh


Corporate social responsibility, Revenue sharing, Supply chain, Coordination


In this paper, a revenue sharing contract with corporate social responsibility (RS-CSR) is proposed for coordinating a two-tier supply chain, which is comprised of a manufacturer and a retailer. The RS-CSR contract requires that the manufacturer should invest some costs in corporate social responsibility (CSR) and charge the retailer a wholesale price. After the retailer sells the products, he/she will return a ratio of his/her revenue to the manufacturer. A mathematical model is proposed to determine the optimal CSR investment, wholesale price and the revenue sharing ratio such that channel coordination and a win-win situation can be achieved. Numerical examples show that the RS-CSR contract can achieve the maximum supply chain profit, increase each supply chain partner’s profit, and usually improve CSR.

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