Abstract:  A threelevel supply chain composed of a domestic producer, a domestic distributor, and a foreign retailer for export cargo model is studied. The study is done for two cases: 1) it is in a bonded port area; and 2) it is in a nonbonded port area. For both cases, optimal supply chain profit is quantitatively analyzed by using backward induction of game theory. The results obtained for the two cases then are compared. It is shown that a winwin result can be obtained for all three parts if it is in a bonded port area. In other words, for this case, in the foreign consumer part, welfare increases, while, in the domestic part, it increases the unit tax rebate for the supplier and the unit value benefit for the distributor. It implies that there is profit gain for all parts.

Key words:  bonded port area, export cargo, backward induction, three-level supply chain