Decision on risk share to maximize the supply chain expected profit

There are many agents in a supply chain, each of which has its uncertainty and risk. A contract between could reduce the In this paper, an insurance with three parameters; retailer’s risk share, supplier’s premium transferred them is considered to maximize profit for all agents. Three mathematical models were developed different types chains, one thousand initial scenarios generated stochastic programming. new algorithm was proposed number scenarios. programmed solved MATLAB software. From numerical examples solved, results show that when retailer gives 0.75 losses from over under stock, keeping, salvage costs, best performance, chain 2.4% extra benefit using it, almost near maximum possible.