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Three-level supply chain coordination of fresh produces under demand disruption with buy back contracts

Author(s): Xie Dong-Chuan, Chen Hong, Wu Zhong-He, Wu Xiao-Zhi

This paper studies a three-level fresh and live produce supply chain consisting of producer, distributor, and retailer, and an optimal response to disruptions under buy back contract is tried to be presented. Firstly, the coordination model under normal conditions is given. Then, the influence of disruptions to the supply chain is discussed when demand perturbation factor distribution is fluctuated by disruptions. The result shows that supply chain coordination is broken off when demand perturbation factor distribution is fluctuated by disruption. So, an adjusted buy back contract is proposed, and it is proved that the new contract can coordinate the supply chain and achieve optimal reaction. Finally, an application example is given.

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