Research On Buy-back Contract Coordination In Supply Chain With Fairness Preference Under Demand Updating

In recent years,with the rapid development of science and technology and economy,people's living standards are constantly improving,which makes customer demand develop towards individualization and diversification,which leads to a high degree of uncertainty in market demand.The high uncertainty of market demand will make it difficult for enterprises to predict market demand accurately and balance supply and demand.This imbalance will enhance the "double marginalization effect" in supply chain,which will bring economic losses to supply chain.Meanwhile,the increase of market demand uncertainty will also lead to the increase of profit gap among members of the supply chain,resulting in the members in a weak position show obvious fairness preference behavior when making decisions.In order to reflect the unfair distribution of benefits and the imbalance between supply and demand truly in the process of supply chain operation,this paper analyses the impacts of fairness preference on supply chain ordering decision-making and coordination under demand updating based on buy-back contract.Concretely analyses as follows:Firstly,a buy-back contract model under stochastic demand is constructed.The research finds that buy-back contract can coordinate the supply chain with stochastic demand.The optimal order quantity of the retailer decreases with the increase of wholesale price,and increases with the increase of buy-back price.The increase of fluctuation degree of market demand will lead to the decrease of expected profits of the retailer and the supplier,as well as the supply chain.Then,demand updating is introduced into the buy-back contract to analyze the impact of demand updating on supply chain order decision and coordination.Based on Bayesian theorem,the two-stage ordering strategy is adopted to establish decision models under centralized and decentralized decision-making respectively.The results show that demand updating does not change the coordination of the buy-back contract,but narrows the coordination range.The order quantity of the retailer in both stages decreases with the increase of wholesale price,and increases with the increase of buy-back price.Meanwhile demand updating can also improve the expected profits of the retailer,the supplier and the supply chain.Finally,fairness preference is introduced into the buy-back contract considering demand updating,and the impact of fairness preference on the order decision and the coordination of the buy-back contract under demand updating is studied.Similarly,the decision models under centralized and decentralized decision-making are established by using the two-stage ordering strategy.The results show that fairness preference does not affect the coordination and coordination conditions of the buy-back contract.Retailer's order quantity in both stages decreases with the increase of wholesale price,and increases with the increase of buy-back price.Compared with the buy-back contract only considering demand updating,the changed trend of retailer's order quantity is more obvious with buy-back parameters in the buy-back contract considering fairness preference under demand updating.When buy-back price is low,the order quantity of the retailer in both stages,retailer's profit and utility,supplier's profit,supply chain's profit and utility all decrease with the increase of fairness preference coefficient.When buy-back price is high,with the increase of fairness preference coefficient,the order quantity of the retailer in both stages,retailer's profit and utility,supply chain's profit and utility increase,supplier's profit decreases.When buy-back price is high,fairness preference is beneficial to the retailer and the supply chain,but no matter how much buy-back price is,fairness preference is always unfavorable to the supplier.