Buy-Back Price-Based Order Quantity Analysis in Different Supply Chains

Abstract

In the supply chain, the buy-back contract can effectively reduce inventory levels and reduce demand uncertainty. It can also reduce the loss caused by the demand uncertainty. Buy-back price is a sensitive factor in buy-back contract. What is the kind of impact to the supply chain? Whether the retailer's ordering policy is the same in different supply chain? In order to answer these questions, this article builds a two-stage supply chain which is composed by a single manufacturer and a single retailer. The supply chain is based on the basic principles of the buy-back contract. In the end, we analyze the effect of the buy-back price to the optimal order quantity.in different supply chains.