Supply chain contract under product cost disruption

Supply chain contracts, as the effective supply chain coordination mechanism, have been extensively investigated in the literature under the stationary setting. We consider a supply chain involving one supplier and one retailer in which a revenue-sharing contract is adopted. Though the supply chain can obtain coordination under the stationary setting using this contract, but emergent and unforeseeable accidents maybe occur, its effects make the supplier´s production cost fluctuate, further, the supply chain´s coordination status maybe be broken off. We give the supply chain´s optimal emergency strategy and propose adjusted revenue-sharing contracts to coordinate the supply chain under the cost disruptions based on the consideration that the supply chain contract mechanisms coordinate the supply chain must consider the effects of risk pooling, especially the risk incurred from the uncertainty of emergent and unforeseeable accidents.