Supplier as a Newsvendor: An Analysis of Pull Contract

Supply chain coordination with contract has played an important role in achieving optimal performance. Unlike traditional push contract, pull contract allows a retailer to stock nothing through pulling inventory risk to supplier who in turn takes in charge of inventory. The paper developed an analysis of pull contract model, and explored some characteristics of optimal quantity and supply chain performance. It was found that the pull contract subsidized by buy back contract can coordinate supply chain, and the buy back price can serve as the key parameter to achieve the cooperative coordination