A centralized/decentralized design of a full return contract for a risk-free manufacturer and a risk-neutral retailer under partial information sharing

Abstract

We consider the design of full return contract in a simple supply chain with a risk-free manufacturer and a risk-neutral retailer. In this problem, the ordering quantity and the rebate price for unsold products are determined by the retailer and the manufacturer, respectively. We propose an optimal solution procedure in centralized and decentralized decision making environments considering when the information sharing among the retailer and the manufacturer is partial. We provide numerical examples to explain the proposed solution procedures. (C) 2011 Elsevier B.V. All rights reserved.