Optimal decisions in a single-period supply chain with price-sensitive random demand under a buy-back contract
type: Item
instance of: scholarly article
title: Optimal decisions in a single-period supply chain with price-sensitive random demand under a buy-back contract
zbMATH Open document ID: 1407.90040
DOI: 10.1155/2014/786803
author: Feng Wang
author: In-Chan Choi
published in: Mathematical Problems in Engineering
publication date: 2019-02-08T00:00:00Z
review text: Summary: This paper studies a single-period supply chain with a buy-back contract under a Stackelberg game model, in which the supplier (leader) decides on the wholesale price, and the retailer (follower) responds to determine the retail price and the order quantity. We analytically investigate the decentralized retailer's optimal decision. Our results demonstrate that the retailer has a unique optimal simultaneous decision on the retail price and the order quantity, under a mild restriction on the demand distribution. Moreover, as it can be shown that the decentralized supply chain facing price-sensitive random demand cannot be coordinated with buy-back contract, we propose a scheme for the system to achieve Pareto-improvement. Theoretical analysis suggests that there exists a unique Pareto-equilibrium for the supply chain. In particular, when the Pareto-equilibrium is reached, the supply chain is coordinated. Numerical experiments confirm our results.
Mathematics Subject Classification ID: 90B05
Mathematics Subject Classification ID: 90B06
Mathematics Subject Classification ID: 91B42
zbMATH DE Number: 7017258
Wikidata QID: Q59072181
MaRDI profile type: Publication
full work available at URL: https://doi.org/10.1155/2014/786803
OpenAlex ID: W2170633115
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description: scientific article; zbMATH DE number 7017258