Retailer-leading supply chain coordination by buy-back contract

摘要

Coordination is essential for improving supply chain performance. This paper studies channel coordination through buy-back contract between a two stage supply chain consisting of one dominant retailer and one manufacturer trading perishable goods. The coordination between the two parties is achieved through buy back contract in such a way that their respective profit is better than that resulted from a decentralized optimization. The key contribution of this paper lies in proposing a function between retailer's gross profit and manufacturer's wholesale price and retailer-leading buy-back model.