An Approach to Improve Supply Chain Profit Through Buy-Back Contract with Reference to a Book Publishing Firm

The purpose of this paper is to investigate the existing practices of buy-back contract adopted by a book publishing firm and the amount of profit gained by the publisher and a distributor as also the total supply chain profit generated under the current contract. The study was carried out in a leading book publishing firm based in India. It has considered the publisher and a distributor based in northern zone of India as two partners in the supply chain acting as a single supplier and a single retailer respectively. The forecast demand of a book is estimated based on qualitative and quantitative factors and thereafter the print-run quantity and volume of returns is determined based on its estimated demand, variability of demand and critical ratio. Finally the optimum buy-back price is found out which maximizes the profit of both publisher and distributor and also the overall supply chain profit