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Title: Reconsideration of negotiation procedure for buyback contract in supply chain

Authors: Shin Tsurui; Yasuhiko Takemoto; Ikuo Arizono; Ryosuke Tomohiro

Addresses: Graduate School of Natural Science and Technology, Okayama University, 700-8530, Okayama, Japan ' Faculty of Science and Engineering, Kindai University, 577-8502, Osaka, Japan ' Graduate School of Natural Science and Technology, Okayama University, 700-8530, Okayama, Japan ' Graduate School of Natural Science and Technology, Okayama University, 700-8530, Okayama, Japan

Abstract: There are some studies about a negotiation procedure between a supplier and a retailer in a supply chain model with a buyback contract. The negotiation procedure in the above studies consists of three successive steps. Through the three successive steps, several candidates for the bargaining solution have been screened step by step, and eventually, the bargaining solution has been uniquely decided. However, the preceding studies of the negotiation procedure have not given a full explanation of the mathematical signification to each role that first and second steps perform on the bargaining solution obtained at third step. Therefore, the purpose of this study is to clarify each role of first and second steps in the negotiation procedure of the preceding studies. Specifically, based on the property of Hessian matrix, we have reconsidered the roles of first and second steps to the global optimality of the bargaining solution obtained at third step.

Keywords: buyback contract; cooperative game theory; coordination approach; Hessian matrix; incentive compatible condition; Nash bargaining solution; negotiation procedure; supply chain.

DOI: 10.1504/IJSCOR.2017.087153

International Journal of Supply Chain and Operations Resilience, 2017 Vol.3 No.1, pp.34 - 55

Received: 31 Jan 2017
Accepted: 14 Mar 2017

Published online: 28 Sep 2017 *

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