Lingyu Huo

Return contract of supply chain with credibility distribution

In a two-stage supply chain composed of one supplier and one retailer, the supply chain coordination mechanism under fuzzy demand environment is studied in this paper under the assumption that the market demands are regarded as fuzzy variable. The models of centralized decision-making and return contract are built based on credibility distribution, and their optimal policies are also proposed. Finally, a numerical example is given to illustrate the models and analyze the influence of parameters on the models. It shows that the retailers optimal order quantity fluctuates at the center of the fuzzy demand and increases with the raise of the retail price. The different wholesale price and return price tactics can be fulfilled by using different parameters, and the coordination of members can be achieved in return contract with fuzzy demand.