Research On Profit Incentive Under Buy-Back Contract And Buy-Back Strategy Under Asymmetric Infromation

The competition between supply chain has been the main mode of market competition in 21st century. Enterprises in supply chain should fight cooperatively to pursue the maximum of global benefit. Comparing to the environment of enterprise, supply chain has more remarkable characteristics such as uncertainty of demand, asymmetry of transmitting information and so on, which may lead to disorder of supply chain, at the same time, each enterprise in supply chain pursues the maximum of personal benefit, which may result in conflict with global objective of supply chain. By means of contract of supply chain, to confine and coordinate members of supply chain, and to improve the global benefit of supply chain have been the hot research point of current supply chain management.The article chooses buy-back contract to do research on the coordination of supply chain. Buy-back contract is a widely used contract, which is main to aim at the commodity which has uncertainty of demand and short market cycle.At first, the article introduces the theory of supply chain management, the theory of supply chain coordination and the basic theory of buy-back contract according to chapters. Then two specific research questions are further put forward by literature review according to buy-back contract, and later solved. First, to aim at the short-life-cycle commodity with uncertain demand, under the situation of information sharing, whether profit incentive of both supplier and demander is certainly achieved by direct buy-back contract is validated, the result shows that the profit of demander is better than before adopting contract, while supplier is uncertain. Therefore, under the situation of uncertain profit incentive which supplier gets, a method of parameter modification is applied. Secondly, under asymmetric information of demander's sales cost, the decision under buy-back contract is researched between supplier and demander. It turns out that demander can get extra profit by offering higher value comparing with real information, which leads to supplier's reduced profit, therefore, the modifiable parameter, wholesale price is redesigned to be the function of misrepresented sales cost. Last, the conclusions are obtained by means of numerical study. Profit incentive of both supplier and demander is achieved by a method of parameter modification to buy-back contract under the situation of information sharing, and favorable precondition is established for both sides to adopt buy-back contract. Sharing of information and absolute coordination of supply chain system are attained by means of redesigning modifiable parameter to buy-back contract under asymmetric information, and it is avoided that supplier pays the price to get real information.