Analysis on supply chain coordination and profit allocation based on buyback contract

Supply chain coordination should consist of two aspects of coordination: behavior coordination and interest coordination. Firstly, the supply chain behavior coordination problem is analyzed based on the buyback contract. Then, three methods about the supply chain´s profit allocation when the supply chain is coordinated are discussed. The three methods are: 1 the supplier´s optimization model considering the retailer´s participation constraint; 2 Nash bargaining method; 3 the method in which the contract parameters are confirmed based on the balance between revenue and risk. Finally, a numerical example is given to illustrate the usage of the three methods, and the comparative analyzes of the three method´s results are analyzed. It can be seen from the example that there exists big difference among the results of the supply chain profit allocation due to the different methods.