Abstract: In relief material management, the purchaser is wrestling with a dilemma in purchase strategy. Reactive purchasing from supermarket implies zero inventory cost but the unit price is high. Proactive purchasing from manufactory is in risk of loss but the unit price is low. By introducing the methodology on supply chain management into relief material management, the supply chain system of a single-purchaser and single-supplier is considered. The research gives out the condition under which, compared with purchasing from supermarket with return policy, proactive purchasing relief material from manufactory with option contract can coordinate the relief material supply chain and achieve Pareto-improvement as well. Moreover, by considering the risk level and risk performance, the profit distribution with an option contract which is acceptable for both the supplier and the purchaser is proposed.

Key words: relief supply chain, coordination with contract, return policy, buyback contract, option contract