Buy-back Contract in Garment Industry Considering #br# Out-of-season Clothes Processing Channels

Abstract

Abstract:

Considering the influence of sales price change and out-of-season clothes processing channels on the apparel supply chain, game theory is applied to present a two-echelon sales supply chain system with single ordering in an apparel supply chain on basis of the buy-back contract. A system analysis is taken for a better understanding about how the buy-back contract would have impact on the supply chain coordination in different time. The results suggest that the midterm buy-back or the final buy-back cannot achieve the optimization of supply chain system. But by setting reasonable wholesale prices and the buy-back prices in mid-term and final-term, the supply channel coordination can be achieved. The combination of reasonable prices and the dispose-down-to policy can bring an effective improvement on the expected channel profit in the centralized setting when dealing with out-of-season clothes. These results are also supported by a numerical example analysis.

Key words: price change, apparel supply chain, buy-back contract, dispose-down-to policy, supply chain coordination

Jian Ming, Zong Han，Li Yuan-yuan. Buy-back Contract in Garment Industry Considering #br# Out-of-season Clothes Processing Channels[J]. Industrial Engineering Journal .

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