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

Author

Listed:
  • Huynh Trung Luong
  • Anuradha Colombathanthri

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.

Suggested Citation

  • Huynh Trung Luong & Anuradha Colombathanthri, 2022. "Coordinating a three-stage supply chain using buy-back and revenue sharing contracts," International Journal of Logistics Systems and Management, Inderscience Enterprises Ltd, vol. 43(1), pages 1-19.
    • Handle: RePEc:ids:ijlsma:v:43:y:2022:i:1:p:1-19
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