Coordination of competing supply chains with news-vendor and buyback contract

Under the competing supply chain framework, we examine the impact of buyback policy on retail price, order quantity and wholesale price in a duopoly of two manufacturer-retailer supply chains. Demand is assumed to follow a general distribution similar to a newsvendor case. We consider two channel policies for both competing supply chains: Vertical Integration (VI) and Manufacturer's Stackelberg (MS). We show that buyback strategy can lead to a higher profit than non-buyback in both VI and MS in competing supply chains, which is consistent with existing result in a single supply chain. We also show that the profits obtained by the supply chain individuals and the entire supply chain profit increase as the chain competition increases. (c) 2011 Elsevier B.V. All rights reserved.