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Buyback Contracts with Price-Dependent Demands: Effects of Demand Uncertainty

  • Yingxue Zhao
  • Xiaoge Meng
  • Shouyang Wang
  • T. C. Edwin Cheng
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 234)

Abstract

Chapter 2 examines buyback contracts in a supplier-retailer supply chain where the retailer faces a price-dependent downward-sloping demand curve subject to uncertainty. Compared with classical research, a fundamental difference of this research lies in its analytical examination of the effects of demand uncertainty on the applicability of buyback contracts. To this end, the research seeks to characterize the buyback contract model in terms of only demand uncertainty level. With such a new research perspective, some new and interesting findings are obtained for such issues as how demand uncertainty level affects the applicability of buyback practice and how to apply this practice to improve supply chain members’ own interests or the supply chain system’s efficiency. The research in this chapter demonstrates that the uncertainty level inherent in market demand can be a critical factor influencing the applicability of supply chain contracts, as well as the contract’s administrative cost (Cachon 2003) and the uncertainty type (Marvel and Peck 1995).

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Yingxue Zhao
    • 1
  • Xiaoge Meng
    • 2
  • Shouyang Wang
    • 3
  • T. C. Edwin Cheng
    • 4
  1. 1.School of International Trade and EconomicsUniversity of International Business and EconomicsBeijingChina
  2. 2.School of Economics and ManagementBeijing University of Aeronautics and AstronauticsBeijingChina
  3. 3.Chinese Academy of SciencesAcademy of Mathematics and Systems ScienceBeijingChina
  4. 4.Department of Logistics and Maritime StudiesThe Hong Kong Polytechnic UniversityHung HomHong Kong SAR

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