Study ON Profit Allocation in Supply Chain Network Equilibrium

Relationship between supply and demand in supply chain network is very complex. Profit is fixed, while profit allocation doesn't satisfy with everyone in supply chain network. So it is necessary to establish contracts to ensure that all corporations shall be content with profit allocation. And this is also important for healthy development of supply chain network. The buy back contract is one of the most important contracts. In this paper, supply chain network equilibrium model is founded on the basis of analysis of the structure of supply chain network, and supply chain network that relationship between supply and demand only exists in adjacent node corporations is taken as an example. At the same time, a buy back contract is introduced to it. All corporations are satisfied with profit allocation and supply chain network equilibrium is achieved under the control of buy back contract. An instance shows that buy back contract works well.