Buyback contract of reverse supply chains with different risk attitudes under fuzzy demands

Abstract

The ever-changing demands lead to the challenge of designing a proper buyback contract of a reverse supply chain. In this paper, we propose a buyback contract model accounting for the fuzzy random demands with different risk attitudes, i.e., pessimistic, optimistic, or risk-neutral. We design the feasible set for coordination by adjusting buyback contract parameters according to the analysis of retailer profitability with multiple choices. Our models show that random demands may lead to the failure of original buyback contract, and dynamic modifications should be executed based on the proposed benefit models to remain the coordination. The results show that our model can allocate total benefits more fairly and keep the supply chain system stable by updating the buyback contract.