The Study on Price Markdown Time for the Retailer in Supply Chain Buyback Contract

Abstract

Buyback contracts are the tools to reduce retailers’ remaining inventory for manufacturing industry Recent literature has rarely discussed the marketing behaviors of the retailer under buyback contracts; hence we consider a buyback contract where the retailer should markdown and share the partial revenue to the supplier during the selling season And we design three scenarios for the retailer to choose: (1) returning unsold units without markdown (2) returning unsold units with markdown and (3) selling all units out with markdown The retailer will depend on the profits of the three scenarios to determine whether to markdown and whether to sell out all units The demand is assumed to be linearly price and time dependent And the retailer’s profit with markdown is a cubic polynomial We use a method to solve the turning point in cubic polynomial The objective in this research is to find the optimal price markdown time to maximize the retailer’s profit The analytical results demonstrate that the retailer can obtain the best profit in the second scenario The effects of contract parameters on profit and optimal markdown time for the retailer are also discussed In addition some managerial insights are provided into the buyback contract for the retailer

Date of Award	2019
Original language	English
Supervisor	Tai-Yue Wang (Supervisor)