Combined Contract of Buyback and Pricing Flexibility to Coordinating Supply Chain Under Price Updating

Abstract

The supply chain contracts are an essential methodology to the coordination of supply chain. This paper focuses on the jointly contracts of buyback and quantity flexibility to study coordination mechanisms in a supply chain. In the fix price case, buy back contracts play an important role to collaborate supply chain system’s profit. In the price setting case, however, it is difficult to realize perfect coordination. In this paper, we investigate the model of jointly contracts by the analysis partier’s expected profits of three scenarios. The first is none of supply contracts is adopted. The second is under the adoption of buyback contracts. The third is under the adoption of jointly contract of buyback and quantity flexible. In doing so, we illustrated the benefit of the joint adoption contracts to the coordination of supply chain and flexible the arrangement of profits between suppliers and retailers.