Supply chain coordination with partial buy-back and target rebate contract under effort and price dependent demand

This paper studies the coordination of a two-level supply chain facing stochastic demand which is dependent on both retail price and sales effort. Since single buy-back contract or sales rebate contract fails to coordinate such a supply chain, we combine the two types of classic contracts and create four new types of combined contracts. Then we respectively analyze the conditions that parameters of each combined contract should satisfy to achieve supply chain coordination. We prove that only partial buy-back and target rebate contract with reasonable parameters can coordinate the supply chain and allocate supply chain´s profit arbitrarily by adjusting the parameters.