Strategy for Supply Chain Coordination Based on Fashion Life Cycle

This paper analyzes the feature that demand for apparel products varies with the market fluctuation, and it thus affects the decision-making program of the supply chain participants. In the case of different game relations, bargaining power, information structure and organizational structure, retailers have diverse risk preferences in different product life cycles. This paper introduces the concept of fashion index and establishes risk aversion coefficient model, analyses expected utility function through both the centralized model and dispersion model, and obtains the optimal buyback strategy. By data simulation, it is demonstrated that the retailer´s risk aversion coefficient is decreasing with the increases of fashion index in different fashion cycles. In order to achieve the perfect coordination of the supply chain, supplier buy-back price will also increase accordingly to encourage retailers. This study indicates that considering the fashion index will give a clearer fashion reflection of the members´ market expectations, thus to obtain optimal coordination parameters to optimize the supply chain profits.