Buy-Back Contract Incorporating Fairness in Approach of Stackelberg GameReport as inadecuate




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This paperdevelops the basic model of the buy-back contract by introducing the fairnessto investigate how the dominant supplier decides the wholesale price, whetherthe buy-back contract can achieve coordination and how the fairness influencesthe wholesale price. It is found that, under Stackelberg game between theretailer and the dominant supplier, the buy-back contract cannot coordinate thesupply chain whether the fairness is incorporated or not. Furthermore, the optimal wholesale price under Stackelberg gameis larger than the initial wholesale price, which can achieve coordination.Moreover, the optimal wholesale price decreases with the retailer’s fairness, while it increases with the supplier’s fairness.



KEYWORDS

Fairness; Stackelberg Game; Wholesale Price; Buy-Back Contract; Supply Chain Coordination

Cite this paper

G. Wei and Y. Yin -Buy-Back Contract Incorporating Fairness in Approach of Stackelberg Game,- American Journal of Industrial and Business Management, Vol. 4 No. 1, 2014, pp. 40-44. doi: 10.4236-ajibm.2014.41007.





Author: Guangxing Wei, Yaxian Yin

Source: http://www.scirp.org/



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