Analysis Of Flexible Buyback Contract About Brand Apparel Supply Chain Coordination

Changes in demand for apparel and clothing itself perishable make clothing retailers face a lot of market risk, so the apparel supply chain considering the risk appetite characteristics is more conform to reality. What’s more, the risk appetite of brand retailers in the apparel supply chain mainly reflects on the excess inventory risk aversion. As the leader of apparel supply chain, the suppliers usually adopts buy-back contract to eliminate the influence of excess inventory risk for retailers, so as to realize the coordination of the supply chain. However, due to the lack of flexible, the traditional buy-back contract cannot provide more choices to retailers.Then, based on the newsvendor model, this paper builds a flexible buy-back contract model so that the retailer can choose many risk to transfer on the basis of the risk characteristics. The main contents are as follows:1. This thesis analyzes the clothing products and the characteristics of the apparel supply chain, the research status and related theory of apparel supply chain are summarized.2. Considering the retailers" risk preference cases, this paper builds a flexible buy-back contract model, and makes comparative analysis between the flexible buyback contract and the traditional buyback contract to point out the different applicable conditions.3. This paper considers the influence of logistics cost for the flexible buyback contract, and the retailer bear the return logistics cost.The main conclusion is that: Considering the retailer overstock risk aversion, between the general buyback contract and flexible buyback contract can achieve perfect coordination of the supply chain, when the demand was evenly distributed the retailers are more willing to accept flexible buyback contract, when the demand is normal distributed the retailers are more willing to accept general buyback contract. For the suppliers, he can achieve the profit distribution among supply chain members by adjusting the whole price. In the case of considering the cost of return logistics, the overall exptected profit of the supply chain increases with return logistics costs and reduce logistics costs. Moreover, when the return logistics costs exceed a certain range repurchase, the flexible buyback contract will become meaningless for the retailer.