Abstract: Robust coordination with buyback contract for a supply chain with only knowing demand mean and interval based on minimax regret criterion is studied. Under the framework of buyback contract, a supply chain coordination model for a two-stage supply chain system with unknown detailed demand distribution is developed by using the performances of supply chain system and its members under optimal decision minus which under robust decision as the objective functions. Under the condition of only knowing demand interval and mean, the robust order policy of integrated supply chain, together with the robust contract coordination policy of decentralized one and the deviations of their performances based on minimax regret criterion are proposed by using robust optimization technology. Furthermore, regrets of supply chain system and its members who do not operating optimally for information lacking are analyzed under different service level and contract parameters. At last, numerical calculation are carried out to verify the robustness and effectiveness of supply chain buyback contract coordination strategy obtained by robust optimization. The results show that supply chain robust coordination strategy based on buyback contract can reduce the impact of demand uncertainty on the performance of supply chain system and its members effectively. Specially, compared to only knowing demand interval, obtaining additional information about mean value can improve the operational performance of supply chain.

Key words: supply chain, robust optimization, minimax regret criterion, coordination, buy-back contract