Research Of Flexible Buyback Contract About Perishable Product’s Supply Chain Coordination

With the continuous progress of science and technology and the rapid development of economic,consumer demand for products tends to be diversified,individual and complex that makes more and more products have the characteristics of perishable goods,which makes the research of perishable products supply chain gradually become an important content in the field of supply chain management.In the case of uncertain market demand,there are two reasons for us to choose the buy back contract to coordinate the perishable product supply chain: first,for high-grade brand,suppliers don’t want retailers at the end of selling season to sell the remaining products with discount,which will influences the supplier’s brand reputation;the second is that supplier can guide the retailer to make reasonable choice of order quantity through the buy back contract,and it will prompt the overall interests of the supply chain,and realize coordination and optimization of supply chain.This paper mainly uses the construction of newsboy model,traditional buy back contract model and flexible buyback contract model to optimize the coordination of perishable products supply chain,and the comparative analysis of the supply chain coordination process for retailers with different risk preference is carried out and comes out the effect of retailer’s risk preference on supply chain coordination.The research contents are as follows:First of all,in order to judge if the buy back contract can realize the coordination of supply chain,this paper builds the supply chain model which is under the integrated decision-making situation.As a result,the standard of the optimal order quantity is obtained.Next this paper discusses the coordination of supply chain with the characteristics of excess inventory risk neutral and risk aversion under the newsboy model with no contract coordination and finds that supply will not be able to achieve coordination under two kinds of supply chain.However,when the retailer’s risk aversion coefficient is introduced,retailers can choose the best order quantity according to their own risk aversion degree.Then,the coordination process of supply chain is optimized by building the traditional buy back contract model with the characteristics of excess inventory risk neutral and risk aversion.The study finds that traditional buy back contract supply chain coordination results are improved.But the repurchase price offered by the supplier is related to the degree of retailer’s risk aversion,which means that supplier determine the repurchase price depends on the degree of risk aversion of the retailer when they face different retailers.However,this will lead to two problems: one is that the retailer’s risk aversion is a private information,suppliers can not easily get it;the second is that supplier provides different repurchase price for different retailers,which will lead the retailer has a psychological imbalance,and it’s not benefit to implement the traditional buy back contract.In addition,in the formulation process of the traditional buy back contract,there is only order quantity for retailers to choose,and retailers own choice on the right and scope is small.Therefore,the traditional buy back contract lacks flexibility in the process of supply chain coordination.At last,the paper builds a buy back contract model of flexible by introducing the concept of option so that retailers can choose the optimal order quantity,buy back quantity and risk transfer according to their own risk aversion,which reduce the influence of retailer’s risk preference on the decision making process during the time of expanding the retailer’s independent choice.Compared to the traditional buyback contract,the optimized buy back contract is more flexible,and retailers are more willing to accept this way of repurchase,thus will be more benefit to achieve coordination and optimization for supply chain.