Title: Coordinating a three-stage supply chain using buy-back and revenue sharing contracts

Authors: Huynh Trung Luong; Anuradha Colombathanthri

Addresses: Department of Industrial Systems Engineering, School of Engineering and Technology, Asian Institute of Technology, Pathumthani, 12120, Thailand ' Department of Industrial Systems Engineering, School of Engineering and Technology, Asian Institute of Technology, Pathumthani, 12120, Thailand

Abstract: In this research, a composite contract model is developed for coordinating a three-stage supply chain which consists of a manufacturer, a distributor and a retailer. The relationship between the distributor and the retailer is coordinated using a revenue sharing contract, while the relationship between the manufacturer and the distributor is coordinated using a buy-back contract so as to encourage the distributor to order more. Mathematical models for these contracts are derived and analysed through numerical experiments to identify the optimal order quantities, the coordination conditions, the effects of the contract parameters and to identify the best possible contract parameter values which can lead to a win-win situation.

Keywords: supply chain; buy-back contract; three-stage coordination; revenue sharing contract.

DOI: 10.1504/IJLSM.2022.125658

International Journal of Logistics Systems and Management, 2022 Vol.43 No.1, pp.1 - 19

Received: 25 Feb 2020
Accepted: 19 Jun 2020
Published online: 26 Sep 2022 *

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