Supply Chain Risk Appetite By Joining The Buy-back Contract Mechanism Studies

With the global economic integration and market competition, how to achieve supply chain coordination is receiving more and more attention. Supply chain contract as a supply chain coordination is an important mechanism; it can effectively coordinate conflicts of interest, in order to optimize the supply chain system. Due to market uncertainty and supply chain risk appetite, so it has great practical significance to consider the risk of supply chain preference of the impact of supply chain contract.This paper reviews the literatures about supply chain contract, and shows the disadvantages, and then discusses the following three aspects, considering the risk preference of decision makers, especially in risk aversion or loss aversion:1,Based on risk preference of partners in supply chain, buy-back contract mechanism in supply chain under the multi-retailoutlet environment is researched. By using expectation effect theory, the risk coefficient for the impact of buy-back contract was studied. It indicated that when retailer was risk neutral, the buy-back price decreased as the supplier's risk coefficient increased; when the supplier was risk neutral and the order quantity was less than a certain quantity, the buy-back price increased as the retailer's risk coefficient increased; and when the order quantity was larger than a certain quantity, the buy-back price became a constant.2,Buy-back contract model in the competitive retail environment was established. Based on competitive alternative coefficient, the decision-making process was researched by doing not provide buy-back contract, the retailer was risk neutral and risk aversion characteristics. It showed that the buy-back price is related to the retail price to achieve a Pareto improvement. When the retail price increased, supplier developed buy-back contract in turn from the supply chain optimization and supplier's own best; When the retail price increased to a certain value, the buy-back contract from the two angles could not achieve a Pareto improvement; When the retailer is risk averse, the best buy-back price was higher than risk-neutral retailer, and the buy-back price increased as the retailer's risk coefficient. 3,Secondary supply chain was extended to a three-stage supply chain; Based on the retailer's loss aversion in supply chain, buy-back contract mechanism model was established. By segmenting effect function to represent the retailer's loss aversion attitude, it analyzed the retailer's loss aversion coefficient on the impact of buy-back contract. The buy-back price from distributor to retailer increased as the loss aversion coefficient increased, as for the risk-neutral manufacturer and distributor, retailer's loss aversion coefficient did not affect buy-back price from the manufacturer to distributor.