Tourism Supply Chain Coordination With Price Discount And Quantity Flexibility Contracts

This paper discussed the coordination problem of a typical two-echelon tourism supply chain (TSC) which involved one hotel and one tour operator. Specifically, we solve this TSC coordination problem with practically employed price discount and quantity flexibility contracts. Optimal ordering policies are obtained respectively for the integrated and Stackelberg game model with risk neutral and loss-averse tour operator. We analyzed the effects of risk preference, price discount and quantity flexibilities on the optimum ordering decisions. Finally, a numerical example is given to illustrate the effectiveness of quantity flexibility contract in enhancing the profit of the whole TSC and the members involved.