Influence of Overstock Risk on Buy Back Strategy in Supply Chain

Putting risk preference into account, with a specific influence factor of overstock risk, the thesis analyzes the objective function of buy back strategy in supply chain from the perspective of "utility", and brings forward that in a certain decision-making process decision makers will weigh the risk of obtaining expected profit as well as measuring the value of the expectation. The thesis proposes an overstock-averse factor to describe the decision-making activities of an overstock-averse retailer, builds a corresponding buy-back model, and draws the quantificational conclusion by comparing the two decisionmaking processes: cooperating with an overstock-risk-averse retailer, the supplier has to offer a stronger incentive, which will bring a risk premium to the retailer.