A Study on the Retailer-Leading Supply Chain Buyback Contract

In the retailer-leading supply chain, the retailer is dominant over the manufacturer through announcing the sensitivity on his order quantity to the manufacturers wholesale price. The wholesale price contract model and the buyback contract model are built. Then we analyze the decisions of the manufacturer and the retailer under the above two contract models, and compare the wholesale price contract with the buyback contract. Research results show that the wholesale price contract and the buyback contract can not coordinate the retailer-leading contract, and the retailer would rather to choose the wholesale price contract than the buyback contract. Simulation testifies the truth of the analysis.