Using Returns Policies to Improve the Supply Chain Performance under Retailers' Competition with Price- Dependent Demand

摘要

This paper investigates a returns policy for coordinating a supply chain comprising one manufacturer and two competing retailers. The manufacturer, as a Stackelberg leader, offers a returns policy to two competing retailers who face stochastic demand before the selling season. Under the offered contract terms, the competing retailers are to determine the quantities to be ordered from the manufacturer prior to the season and the retail price at which to sell the items during the season. The process of pricing and ordering is expected to result in an equilibrium as in the Bayesian Nash game. On the basis of anticipated responses and actions of the retailers, the manufacturer designs the returns policy. Adopting the classic newsboy problem model framework and using numerical study methods, this study finds that the provision of returns policy can obtain better performance (Pareto improvement) than in a price-only contract. In addition, we have analysed the other impact factors on the supply chain performance.