Study on coordinate and incentive mechanism for car rental supply chain

Car rental industry has been developing fast in China, but some problems like the insufficiencies of order quantity and profits and too long the car replacement period decelerate further development of the industry. This paper introduces a buyback mechanism, and discusses the impacts of a buyback contract on car rental supply chain. Research shows that an appropriate buyback mechanism can shorten the renter´s car replacement period and make the Pareto improvement of both sides in the rental supply chain under linear demand. In a word, coordination and cooperation of the car rental supply chain is hopefully to be realized by designing this buyback contract appropriately.