Supply chain wholesale price contract and risk hedge strategy under risk of demand and exchange rate

Jointly consider the demand risk and exchange rate risk of the global supply chain. With a Two-echelon Supply Chain under global environment for modeling background, this paper establishes a dynamic game model about manufacturer and retailer, gains the results of the equilibrium, studies how the uncertainty of the exchange rate and exogenous demand influence the manufacturer´s original wholesale price , incentive degree, the retailer´s order quantity and exchange rate risk hedge strategy. The results show that the manufacturer´s original wholesale price and the incentive degree are unaffected by exchange rate and demand exogenous fluctuation. The retailer´s order quantity is unaffected by exchange rate exogenous fluctuation, but decreases with an increase in the demand exogenous fluctuation. The retailer´s exchange rate risk exposure proportion decreases with an increase in the exchange rate exogenous fluctuation, and increases with an increase in the demand exogenous fluctuation. The results indicate that the retailer´s exchange rate risk hedge strategy can stabilize the supply chain operation strategy.