A Two Level Supply Chain Model Where Demand Is Stochastic Additive Under Buyback Policy

In this paper, attention has been paid to the study of a supply chain model consisting of one manufacturer and two retailers where buyback policy has been incorporated. We have modeled the manufacturer and retailers optimality system as a profit maximization problem to determine the stochastic order quantity and selling price of the retailers. The demand focused by the manufacturer and retailers is stochastic additive in nature which is also price sensitive and also it depends on the preference of the number of customers to the retailers. Both centralized and decentralized cases of the supply chain have been analyzed by using the normal distribution. One numerical example is provided to illustrate and demonstrate the proposed model. A comprehensive sensitivity analysis with respect to major parameters is carried out and some managerial inferences are obtained.