Adopting the concept of mental accounting, the paper analyzes loss-aversion retailer’s optimal order quantity under buy-back contract in the two-stage supply chain, and proves the existence and uniqueness of the optimal order quantity. Conclusions show: under the certain degree of loss aversion, there exists a unique repurchase price to achieve supply chain coordination; meanwhile, the system’s...

Abstract: Based on two substitute products, we study the inventory and contract coordination strategy of a three-echelon supply chain, which consists of two suppliers, a manufacturer and a retailer, under supply disruption and stochastic demand. We investigate the channel gross profit model of the centralized supply chain and obtain a unique optimal order quantity. Under a decentralized decisio...

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 th...

A very rich and reliable bookie posts odds on a horse race. He values a contract which pays a pound of gold if Stewball wins at one ounce of gold. He values a contract which pays a pound of gold if Molly wins at one ounce of gold. He will buy or sell these contracts in any quantity at what he considers the fair price or better. Suppose that he also deals in contracts which pay a pound of gold i...

According to the Council of Supply Chain Management Professionals (September 2007), we have the following description for supply chain management: “supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel pa...