Buyback Contracts with Price-Dependent Demands: Effects of Demand Uncertainty

Yingxue Zhao, Xiaoge Meng, Shouyang Wang and T. C. Edwin Cheng
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Yingxue Zhao: University of International Business and Economics
Xiaoge Meng: Beijing University of Aeronautics and Astronautics
Shouyang Wang: Academy of Mathematics and Systems Science
T. C. Edwin Cheng: The Hong Kong Polytechnic University

Chapter Chapter 2 in Contract Analysis and Design for Supply Chains with Stochastic Demand, 2016, pp 19-59 from Springer

Abstract: Abstract Chapter 2 examines buyback contracts in a supplier-retailer supply chain where the retailer faces a price-dependent downward-sloping demand curve subject to uncertainty. Compared with classical research, a fundamental difference of this research lies in its analytical examination of the effects of demand uncertainty on the applicability of buyback contracts. To this end, the research seeks to characterize the buyback contract model in terms of only demand uncertainty level. With such a new research perspective, some new and interesting findings are obtained for such issues as how demand uncertainty level affects the applicability of buyback practice and how to apply this practice to improve supply chain members’ own interests or the supply chain system’s efficiency. The research in this chapter demonstrates that the uncertainty level inherent in market demand can be a critical factor influencing the applicability of supply chain contracts, as well as the contract’s administrative cost (Cachon 2003) and the uncertainty type (Marvel and Peck 1995).

Keywords: Buyback Contract; Supply Chain Contracts; Retail; Deterministic Demand Case; Repurchase Price (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-1-4899-7633-8_2

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DOI: 10.1007/978-1-4899-7633-8_2

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