Construction of Contract Model of the Government Sharing Enterprise Emergency Production Costs

It is imperative to find a new way of cooperation to meet the needs of joint reserve of government and enterprise which the traditional way of subsidy can not meet. In view of emergency materials such as medicines and food, considering the government’s allocation of the enterprise’s emergency production cost and the appropriate subsidy to surplus materials, a cost contract model was constructed based on emergency production cost allocation coefficient and surplus material subsidy coefficient to seek the decision of both government and enterprises and obtain the conditions for the coordination of emergency supply chain, which was deduced and proved by reverse order solution method, and the simulation checking calculation of the calculation example were also carried out. The results show that the implementation of the cost contract can achieve system cost savings, and the government can realize the allocation of system cost savings between government and enterprise by making different decision combinations to control the purchase price. And both theory and numerical simulation illustrated that cost contract can realize coordination of emergency supply chain.