How to Coordinate Supply Chain Under O2O Business Model When Demand Deviation Happens

Jun ZHANG, Hong CHEN, Junsheng MA, Kesheng TANG


In this paper, a supply chain consisting of one supplier and multiple O2O retailers is studied. The supply chain is coordinated under the revenue-sharing contract in the static case. Disruptions make the price sensitivity coefficient change after the production plan is formulated. In centralized supply chain, the supplier only needs to adjust the retail price if the disruption is in a certain range. When the disruption is large enough, what the supplier needs to do is adjust the retail price and the production quantities. In decentralized decision, the supply chain cannot be coordinated. This means that the original revenue-sharing contract cannot coordinate the disrupted supply chain. An improved revenue-sharing contract is used to coordinate the disrupted supply chain. The research shows that the improved contract can coordinate the original supply chain and the disrupted supply chain, which means that the contract has robustness when facing demand deviation.


Supply chain coordination; O2O business model; Sales channel; Demand deviation; Revenue-sharing contract

Full Text:



Amanda. (2013, March 13). China e-commerce market to reach 30 trillion yuan in 2020. China Internet Watch.

Cachon, G. P., & Larivere, M. A. (2005). Supply chain coordination with revenue sharing contracts: strengths and limitations. Management Science, 51(1), 30-44.

Chen, Y. C., & Hsieh, H. C., et al. (2013). Improved precision recommendation scheme by BPNN algorithm in O2O commerce. E-Business Engineering (ICEBE), 2013 IEEE 10th International Conference on. IEEE.

Clausen, J., Hansen, J., & Larsen, J., et al. (2001). Disruption management. OR/MS Today, 28(5), 40-43.

Dong, L., Li, J. B., & Liu, Z. X. (2012). Supply chain contracts under demand and cost disruptions with asymmetric information. International Journal of Production Economics, 139, 116-126.

Du, Y. S., & Tang, Y. C. (2014). Study on the development of O2O e-commerce platform of china from the perspective of offline service quality. International Journal of Business and Social Science, 5(4), 308-312.

Giannoccaro, I., & Pontrandolfo, P. (2004). Supply chain coordination by revenue sharing contracts. International Journal of Production Economics, 89(2), 131-139.

Hong, W. C. (2013). Quanzhou agricultural e-commerce platform based on O2O modes. 2013 International Workshop on Computer Science in Sports. Atlantis Press.

Hsieh, H. C., Chen, Y. C., & Lin, H. C. (2014). More precise: Stores recommendation under O2O commerce. International Journal of Computing and Digital Systems, 3(2), 91-99.

Huang, C. C., Yu, G., & Wang, S., et al. (2006). Disruption management for supply chain coordination with exponential demand function. Acta Mathematica Scientia, 26B(4): 655-669.

Qi, X., Bard, J. F., & Yu, G. (2004). Supply chain coordination with demand disruptions. Omega, 32(4), 301-312.

Snoek, J., & Rund, B. (2014). European B2C E-commerce report 2014. Available from

Tsai, T. M., & Yang, P. C., et al. (2013). Pilot study toward realizing social effect in O2O commerce services. Social informatics (pp.268-273). Springer International Publishing, 268-273.

Xiao, T., Yu, G., & Sheng, Z., et al. (2005). Coordination of a supply chain with one-manufacturer and two-retailers under demand promotion and disruption management decisions. Annals of Operations Research, 135(2), 87- 109.

Xiao T., & Qi, X. (2008). Price competition, cost and demand disruptions and coordination of a supply chain with one manufacturer and two competing retailers. Omega, 36(5), 741-753.

Xu, M., Qi, X., & Yu, G., et al. (2006). Coordinating dyadic supply chains when production costs are disrupted. IIE Transaction, 38(9), 765-775.

Zhao, S. X., & Zhang, X. W. (2014). Research on the development of traditional retail trends based on O2O-Wanda group as an example. 2014 International Conference of the Academy of International Business- U.S. Northeast Chapter. Atlantis Press.



  • There are currently no refbacks.

Copyright (c) 2015 Management Science and Engineering

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.

We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in Management Science and Engineering are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address:1055 Rue Lucien-L'Allier, Unit #772, Montreal, QC H3G 3C4, Canada.

Telephone: 1-514-558 6138
Http:// Http://

Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures