Buy-Back Price-Based Order Quantity Analysis in Different Supply Chains

In the supply chain, the buy-back contract can effectively reduce inventory levels and reduce demand uncertainty. It can also reduce the loss caused by the demand uncertainty. Buy-back price is a sensitive factor in buy-back contract. What is the impact to the supply chain? Is the retailer's ordering policyin a different supply chain? To answer these questions, this article builds a two-stage supply chain that is composed of a single manufacturer and a single retailer. The supply chain is based on the basic principles of the buy-back contract. In the end, we analyze the effect of the buy-back price to the optimal order quantity in different supply chains.