A New Buy-back Contract Coordinating Dual-channel Supply Chain under Stochastic Demand

The conflict between the manufacturer and the retailer except the double marginalization is an important issue in order to coordinate the dual-channel supply chain. In the general case of the non-linear stochastic demand which also is affected by the sales effort of the retailer, this paper designs a new buy-back contract to coordinate the dual-channel supply chain. On the base of developing the Stackelberg game model between the manufacturer and the retailer, the value of every parameter for the new buy-back contract, which can coordinate the dualchannel supply chain, is achieved respectively. The numerical experiment shows that the effort of the retailer can promote the sales amount of the retailing channel and the direct selling, and increase the profits of the manufacturer and the retailer simultaneously, while the overmuch effort of the retailer isn’t good anymore.