Abstract: To analyze the impact of asymmetric disruption information on the supply chain contract design, the optimal contract design problem is investigated when the manufacturer experiences production cost disruption and the production cost disruption information is asymmetric. Based on the assumption that the market demand is nonlinearly determined by the retail price, by utilizing the principal-agent theory, the optimal contract menus under asymmetric production cost disruption information are derived. And the impact of asymmetric production cost disruption information on the supply chain performance is analyzed. It is found that appropriate contract menus can be devised to improve the supply chain performance when the market demand takes the form of exponential function or constant-elasticity function. Under asymmetric production cost disruption, the original production plan is still optimal under some specific conditions. And the asymmetry of production cost disruption does not necessarily lead to profit loss for the supply chain. At last, some numerical examples are given to verify the results obtained this paper. These results will help to improve the operation efficiency of the supply chain under asymmetric production cost disruption scenario.

Key words: disruption management, asymmetric information, contract design, nonlinear demand