The Model Of The Supply Chain Coordination Based Buy-back Contract

The view of Supply chain thinking has been widely accepted by people. Today, the Competition among enterprises has grown from a simple competition between individual enterprises turned into competition among the supply chain.enterprises can not succeed in the competition only if the supply chain ,where the enterprises belong to, is integrated effectively. But the supply chain is a corporate network which is composed of a number of independent subjects,and in the process of cooperatiing, because of their different objectives,limited resources and their unique information resources, the enterprises of tht supply chain have a conflict of interest inevitably.As a result, the situation of the discoordination of supply chain arises.To achive the object of supply chain coordination,how to make the supply chain integrated effectively and how to solve the problem about the discoordination of supply chain , is the focus problem in the current theory and practice,so the study of supply chain coordination has a strong academic and practical significance. Though a large number of the theoretical study by the theorists and constant practical test by practitioners, they found that the contract mechanism of supply chain coordination is an effective way to achieve supply chain coordination.The common ways of supply chain coordination include wholesale price contracts,revenue sharing contracts,quantity discounts contract and buy-back contracts, etc.These contracts have their own adaptability, and they are used widely in the enterprises, people have realized the importance of supply chain coordination increasingly.The object of study in this paper is the buy-back contract ,which is one of the contracts in the coordination mechanism of supply chain. First,in the case of demand uncertainty, how to achieve the supply coordinate by buy-back contracts ?The result of research is that the traditional buy-back contract strategy can achieve supply chain coordination. Then,in the case of demand effected by the promotional efforts, the paper studies the buy-back strategy and proves that the traditional buy-back contracts can not achieve supply chain coordination, but, in the same case, the buy back contract strategy under the cost-sharing can achieve the coordination of the supply chain.Finally, in the case that the demand is effected by the promotional efforts and out of stock is not allowed, we find that buy back strategy research, the results show that: traditional buy-back contract strategy,the buy back contract strategy under the cost-sharing can not achieve the supply chain coordination, then suppliers can take reward and punishment strategy to make the supply chain coordination. in this case, reward and punishment strategy can stimulate the retailer's enthusiasm of ordering and promotional efforts effectively. It is finally proved that suppliers can achieve supply chain coordination by the buy back contract strategy under punishment and reward strategy and the correctness is verified through the numerical analysis.