A Financing Newsvendor Inventory Problem with Supplier Buyback Contract Based on Biased Game

In this paper, we assume that the supplier will buy-back the retailer’s unsold goods when the retailer order more than the market demand in the capital-constrained newsvendor problem, so the retailer and supplier can take on the hazard together. This system forms the biased game through the retailer and supplier making the order quantity, the supply price and buy-back price for their max-profits respectively. Furthermore, we studied the current satiation of the supply chain integration between the suppliers and the retailers. At last, a numerical example was included to illustrate the effect of the supply chain integration.