Abstract: This paper conducts a research on buy back coordination mechanism in supply chain system of a single supplier and a single retailer.The double marginalization effect under the new sboy model in a two stage supply chain is analyzed.The profit models of the supply chain members are constructed to analyze the way to eliminate the double marginalization effects through wholesale price contracts.The results show that buy back contract can lower the wholesale price increase the order.Thus the total profits in crease and losses reduce while customer's needs meet better.Ultimately,the optimal decision making inde pendently by the supplier and retailer is consistent with the system optimal in the supply chain.

Key words: double marginalization effects, contract, coordination, repurchase lease, supply chain