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Journal of Systems Science and Complexity

, Volume 31, Issue 3, pp 750–772 | Cite as

Mechanisms of Collaboration in the Hotel Supply Chain: Two-Stage Ordering Contract and Option Contract

  • Li Zhang
  • Fei Ye
Article
  • 97 Downloads

Abstract

This paper considers a hotel supply chain consisting of a hotel and an online travel agent (OTA) for the distribution of a limited number of rooms through both offline and online channels. Under the merchant cooperation assumption, to overcome the disadvantages of the decentralized decision model and demand uncertainty, two collaboration mechanisms, namely a two-stage ordering contract and an option contract, are introduced to increase the profit in the hotel supply chain. This paper investigates the optimal decisions of the hotel and the OTA under different contract models. Moreover, the authors analyze the effect of demand uncertainty and the interaction of demand variability and the hotel’s capacity on the profits of the hotel and the OTA under different models. The results show that both the two-stage ordering contract and the option contract can increase the profits of the entire supply chain and the hotel; however, the profit of the OTA can be increased through the two-stage ordering contract and option contract only when the hotel’s capacity is relatively small and the demand variability is big; otherwise, the two collaboration mechanisms cannot increase the OTA’s profit.

Keywords

Demand uncertainty dual-channel option contract two-stage ordering contract 

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Copyright information

© Institute of Systems Science, Academy of Mathematics and Systems Science, CAS and Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.School of Business AdministrationSouth China University of TechnologyGuangzhouChina

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