Research On Global Supply Chain With Combined Contract Of Quantity Discount And Return Policy

With the advance of economic globalization and the rapid development of the gl obal economy,global competition has become increasingly fierce.In order to hold on t o theirs’favorable position in the intense market competition.enterprises establish glob al supply chain(GSC)to choose business partners globally.By means of the establishme nt of global supply chain,enterprises can help them achieve the optimal global resourc e allocation.As to obtain operation optimization,enterprises participating in GSC should properly handle the cooperation among business partners.Therefore,coordination comes up to be one of the most important components of GSC for better operational perfo rmance.The members of global supply chain located in different countries which have di fferent economic policy and foreign policy,due to the wide distribution of the member s,the transportation cost,uncertainty of market demand and the risk of exchange rate fl uctuation have increased which bring more risk for the whole supply chain.When mult inational corporation make decisions they must consider exchange rate fluctuation and tr ansportation cost which will affect the operation of the supply chain.In this study,we first review related literature on quantity discount and return pol icy and global supply chain, secondly,by using Game Theory and Newsboy model theo ry,an return policy model and combination model of quantity discount and return poli cy are established which study on a two-level global supply chain system under three different situations such as without considering transportataion cost.considering transp ortataion cost and using foreign exchange rate.we solve the models and discuss the re lationship between related parameters such as wholesale price,return price,quantity disc ount rate,transportation cost-sharing coefficients and we also analyse how these param eters change the supplier’s and retailer’s profits.The results of the numerical examples show that:firstly,both return policy model and combination model can coordinate supply chain under three different situations.be sides,appropriate contract parameters can not only realize coordination of supply chain, but also can realize win-win of supplier and retailer;secondly,without considering the fluctuations of exchange rate,the effect of supply chain coordination by return policy is worse than combination contract,but when we consider the fluctuations of exchang e rate,return policy can achieve better effect of supply chain coordination;thirdly,after considering transportation cost.the optimal order of supply chain system and whole pr ofit are less than when we don’t consider transportation cost,which indicate that it is necessary to take transportation cost into consideration in the decision-making of glob al supply chain management;fourthly,when we use foreign exchange option,with the in crease of option premium,the profit of supplier is reducing and the profit of retailer i s remain the same;finally,we find that return price and the profit of supplier change i n the same direction with wholesale price,quantity discount rate,transportation cost-shar ing coefficients,the profit of retailer changes in the reverse direction with wholesale p rice.quantity discount rate,transportation cost-sharing coefficients.