Abstract: To short-life-cycle product with long lead time of production and short selling season, such as fashion and some electronic product, retailer is admitted to change its order after the demand information is updated in quick response strategy (QR). The manufacturer in the supply chain has two production modes. One is slow response mode with long lead time and low cost, and another is fast response mode with quick response and high cost. The research of QR combined with coordination contracts is one of the hot topics of supply chain management of short-life-cycle products. In the two-stage supply chain where manufacturer dominated, price discount contract is used to induce the retailers placing the order in advance. To the retailer, the discounted price can increase its profits in the two-stage ordering mode. But the results show that price discount contract can not coordinate the supply chain with two-stage ordering. A joint contract of price discount and buy-back is designed to coordinate the supply chain. The conditions of discounted price and buy-back price are studied. The numeric results show that the manufacturer’s profits of joint contract may be worse than that of price discount contract when the cost increase fast in the quick response mode. By redesigning the price discount and buy-back price, the contract based on Nash negotiation model can not only get optimal benefit of the whole supply chain, but also improve the benefit of the retailer and the manufacturer greatly compared with price discount contract. The price discount contract and the joint contract of price discount and buy-back are applied to a three-stage supply chain. The necessary condition that two-stage ordering policy can be carried out in a three-stage supply chain is that both the distributor and the retailer set the same optimal order in advance. The numeric results show that the manufacturer offers very little discount or no discount to the distributor under price discount contract. Compared with the two-stage supply chain, the efficiency of discount contract used in the three-stage supply chain is lower. The joint contract of price discount and buy-back can also coordinate the three-stage supply chain. This joint contract meets the condition of incentive compatibility constraint for both the distributor and the retailer. The joint contract studied in this paper can applied to the supply chain of short-life-cycle product with two production and ordering modes in practice.

Key words: supply chain contracts, information updating, coordination, two production and ordering modes