Price negotiation and coordination in outsourcing supply chain under yield and demand uncertainties

This paper considers the issues of pricing, lot-sizing decisions and coordination in a supply chain consisting one original equipment manufacturer (OEM) contract (CM). A Bayesian game accounting for asymmetric information is established to optimize CM’s outsourcing price OEM’s selling price. Stackelberg incorporating yield demand uncertainties subsequently modeled production quantity order quantity. Finally, shortage penalty with surplus purchase proposed coordinate chain. It found that optimal either lower limit or stationary point common domain, while upper limit. Whether CM adopts conservative an aggressive strategy depends on threshold Moreover, offers great flexibility parameter selection. By setting quantity, properly, can realize win-win situation.