Study On Differentiated Buyback Contract Of Supply Chain Considering Customer Return Under Stochastic Demand

Generally, in decentralized supply chain, each member makes decision by pursuing its own maximum profit, which leads to that the entire supply chain performance cannot achieve optimum state of centralized supply chain. In order to avoid "double marginalization effect", the leader corporation may choose supply chain contract to coordinate the behavior of each member. Therefore, the study of supply chain coordination contract has vital significances.This dissertation studies the supply chain coordination mechanism in the two-echelon supply chain, composed by one single manufacture and one single retailer. We study the situation that the supply chain contains two kinds of returned goods, one is the expected remaining goods from the retailer and the other one is the returned goods from the customers at the end of the sales period. The main research works of this thesis are described as follows:(1) This thesis gives a circumstance that the customer false return rate is exogenously given, market demand is stochastic and the demand is with respect to retail price. We consider the following factors, such as the retailer needs to spend some dealt costs to the false failure return goods from the customers, the retailer owns the stock loss, the two kinds of returned goods have different salvages. When the manufacturer provides return policy to the retailer, it uses differentiated buyback prices to the two kinds of returned goods, also, it spends some dealt costs to the false failure return goods from the customers. By introducing the extended newsboy model and employing Stackelberg methods and the return policy with differentiated buyback contract and the joint differentiated buyback contract with sales rebate and penalty(SRP), we discuss the two contracts’ effectiveness to the coordination of the supply chain. Finally, we give numerical examples, and sensitivity analysis of some relevant parameters. We find that compared with the optimal decision of the centralized supply chain, the joint contract can well coordinate the supply chain. Compared with the optimal decision of the wholesale price contract, the joint supply chain contract can reduce the retail price of the product, increase product order quantity and the overall profit of the supply chain.(2) Based on the above studies, we further take the factor of non-price sales effort on retailer level into consideration. In this case, market demand is also stochastic, but the demand is simultaneously affected by retail price and non-price sales effort on retailer level, and customer false return rate depends on the retailer’s sales effort. We still study whether the above two supply chain contracts are effective or not. Then, we give numerical examples, and sensitivity analysis of some relevant parameters. We find that compared with the optimal decision of the centralized supply chain, the joint contract can well coordinate the supply chain. Compared with the optimal decision of the wholesale price contract, the joint supply chain contract can reduce the retail price of the product, enhance the retailer’s sales effort level and increase product order quantity and the overall profit of the supply chain.