NDLI: Ordering and pricing model of risk-averse retailer under Exchange Rate and Demand Uncertainties

Content Provider	IEEE Xplore Digital Library
Author	Fanghua Bao Jingming Pan Xiaowo Tang
Copyright Year	2012
Description	Author affiliation: School of management and Economics, University of Electronic Science and Technology of China, Chengdu, China (Fanghua Bao; Jingming Pan; Xiaowo Tang)
Abstract	Under exchange-rate and demand uncertainties, this paper studied the optimal ordering and pricing decision of a risk-averse retailer who served by two suppliers, one foreign supplier and one domestic supplier. We developed a model with mean-variance utility function to describe the retailer's risk aversion. After that we analyzed the impact of the two risks upon the optimal order quantities and retail price. The results show that when the retailer orders from both of the two suppliers, the order quantity from foreign supplier is a constant number, which is only associated with the mean value and variance of exchange rate; while the order quantity from domestic supplier is just a complement to the gross quantity, which is only associated with the distribution form and characteristic value of demand. Finally, we conducted a numerical study to investigate the effect of demand risk on the optimal order quantities and retail price through comparative static analysis.
Starting Page	244
Ending Page	247
File Size	313970
Page Count	4
File Format	PDF
ISBN	9781457720246
e-ISBN	9781457720253
DOI	10.1109/ICSSSM.2012.6252229
Language	English
Publisher	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Publisher Date	2012-07-02
Publisher Place	China
Access Restriction	Subscribed
Rights Holder	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subject Keyword	exchange rate risk Exchange rates Uncertainty Supply chains ordering Pricing Marketing and sales demand risk Risk management risk-averse global supply chain pricing
Content Type	Text
Resource Type	Article

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