The channel coordination has been more and more important in the industries. In order to rise the channel coordination profits, the manufacturer need to supply more schemes to attract retailer to increase his stocking level. The studies referenced that the booksellers implemented the return policy at 1932. In 1995, the return ratio of college textbook had already reached 40%. We can not only improve the channel profits but also the channel efficiency if we use the return policy and quantity discount correctly. This research constructs four models by considering demand uncertainty. 1. Uncoordinated model. 2. The retailer’s minimum expected profit. 3. Quantity discount. 4. Return policy and quantity discount. Through the analysis of these four models, we can calculate the change of profit among these policies.
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