Evaluating Manufacturer's Wholesale Price Policy Under Order Postponement With Buyback Option

Inthisarticle,adecentralizednewsvendormodelisanalyzedinthepresenceofdemanduncertainty, wheretheretailerwishestopostponehisorderingdecisionbyfewdaysuntilthemostaccuratedemand informationisavailable.Theimpactofsuchorderpostponementontheequilibriumprofitsofboth manufacturerandretailerwithandwithoutabuybackcontractissubsequentlyexaminedtoobtaina rangeofwholesalepriceswithinwhichthemarginalprofitsforbothmanufacturerandretailerwhich arenon-negative.Furthermore,itisobservedthatthepossibilityofimplementingorderpostponement ishigherwhenitisdoneinthepresenceofabuybackcontractasitincreasesthemarginalprofitsfor bothmanufacturerandtheretailerandexpandsthefeasibleregionofwholesaleprice,whichleads toaprovisionofhigherflexibilityfornegotiationbetweenthemanufacturerandtheretailer. KEyWORDS Buyback Contract, Manufacturer, Marginal Profit, Optimal Order Quantity, Order Postponement, Postponement, Retailer Manufacturer Dyad, Retailer, Wholesale Price

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