Supply chain management has attracted managers and researchers attention during last two decades. Since uncoordinated decisions of economically independent units of supply chain can lead to deviation of system optimal performance, the supply chain coordination is emerged as one of the most important and appealing subjects. In the related literature contract design mechanisms are introduced as appropriate techniques for coordination. In this research, by using contact design, the coordination of a two level supply chain consisting of one manufacturer and one retailer is studied. At first, the early order commitment contract is explained, then the risk sharing between the manufacturer and retailer is shown. In addition, the reduction in total costs of retailer, manufacturer and whole supply chain is calculated. Numerical studies have indicated that only under certain range of parameters the early order commitment contract can reduce total supply chain costs. In continue, the combination of buy back contract with early order commitment contract is studied and effect of return policy on early order commitment contract is examined.Numerical analysis shows that considering return policy can improve supply chain performance under certain conditions of parameters. Furthermore, some numerical analyses are done in order to determine optimal early order commitment period and best buyback price. Finally a revenue sharing scheme is presented in order to achievement of retailer to win-win condition.
