TY - JOUR
T1 - Optimal decisions in a single-period supply chain with price-sensitive random demand under a buy-back contract
AU - Wang, Feng
AU - Choi, In Chan
N1 - Publisher Copyright:
© 2014 Feng Wang and In-Chan Choi.
Copyright:
Copyright 2018 Elsevier B.V., All rights reserved.
PY - 2014
Y1 - 2014
N2 - This paper studies a single-period supply chain with a buy-back contract under a Stackelberg game model, in which the supplier (leader) decides on the wholesale price, and the retailer (follower) responds to determine the retail price and the order quantity. We analytically investigate the decentralized retailer's optimal decision. Our results demonstrate that the retailer has a unique optimal simultaneous decision on the retail price and the order quantity, under a mild restriction on the demand distribution. Moreover, as it can be shown that the decentralized supply chain facing price-sensitive random demand cannot be coordinated with buy-back contract, we propose a scheme for the system to achieve Pareto-improvement. Theoretical analysis suggests that there exists a unique Pareto-equilibrium for the supply chain. In particular, when the Pareto-equilibrium is reached, the supply chain is coordinated. Numerical experiments confirm our results.
AB - This paper studies a single-period supply chain with a buy-back contract under a Stackelberg game model, in which the supplier (leader) decides on the wholesale price, and the retailer (follower) responds to determine the retail price and the order quantity. We analytically investigate the decentralized retailer's optimal decision. Our results demonstrate that the retailer has a unique optimal simultaneous decision on the retail price and the order quantity, under a mild restriction on the demand distribution. Moreover, as it can be shown that the decentralized supply chain facing price-sensitive random demand cannot be coordinated with buy-back contract, we propose a scheme for the system to achieve Pareto-improvement. Theoretical analysis suggests that there exists a unique Pareto-equilibrium for the supply chain. In particular, when the Pareto-equilibrium is reached, the supply chain is coordinated. Numerical experiments confirm our results.
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U2 - 10.1155/2014/786803
DO - 10.1155/2014/786803
M3 - Article
AN - SCOPUS:84929994798
VL - 2014
JO - Mathematical Problems in Engineering
JF - Mathematical Problems in Engineering
SN - 1024-123X
M1 - 786803
ER -