Research On The Return Policy For Short-Life-Cycle Products In Supply Chain Environment

Due to economic globalization, product proliferation and technological progress, competition in market among enterprises became more and more fierce, customers' demand became individuation, diversification and instantaneous. Viewing the current market, more and more short-life-cycle products appeared, coming along with the fast development of technology and the gradual protruding features of the buyer's market. Therefore, based on supply chain coordination decision, to establish a supply chain coordination mechanism for short-life-cycle products has significant value in theory and practice to optimize the plan of production and marketing for short-life-cycle products, to increase the whole profit of supply chain and to make manufacturer and retailer get win-win.The article involves the theory of the supply chain coordination and studies the return policy and sales-volume-incentive contract in dealing with the short-life-cycle product that is characterized by the uncertain demand and the single-cycle with one selling period. In the paper, it is analyzed for the demand characteristic of short life cycle products, such as the uncertain demand; price-sensitive random demand and stochastic effort-dependent demand, and then the corresponding functions of demand are provided, after then the return policy under the price-sensitive random demand and the model of sales-volume-incentive contract under the stochastic effort dependent demand are established. It is discussed how to design parameters of contracts for a supplier and how to make an optimal order decision for a retailer in order to realize the optimization of the whole supply chain. At last, a numerical example is presented to illustrate that under the conditions of a price-sensitive random and a stochastic effort-dependent demand, the optimal profit under central control can be attained in the whole supply chain with the new returns contract, supply and retailer can get win-win.