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Supply Chain Coordination with a Loss-Averse Retailer and Combined Contract
| Content Provider | MDPI |
|---|---|
| Author | Liu, Wei Song, Shiji Qiao, Ying Zhao, Han |
| Copyright Year | 2020 |
| Description | This paper studies the supply chain coordination where the retailer is loss-averse, and a combined buyback and quantity flexibility contract is introduced. The loss-averse retailer’s objective is to maximize the Conditional Value-at-Risk of utility. It is shown the combined contract can coordinate the chain and a unique coordinating wholesale price exists if the confidence level is below a threshold. Moreover, the retailer’s optimal order quantity, expected utility and coordinating wholesale price are decreasing in loss aversion and confidence levels, respectively. We also find that when the contract parameters are restricted, the combined contract may coordinate the supply chain even though neither of its component contracts coordinate the chain. |
| Starting Page | 586 |
| e-ISSN | 22277390 |
| DOI | 10.3390/math8040586 |
| Journal | Mathematics |
| Issue Number | 4 |
| Volume Number | 8 |
| Language | English |
| Publisher | MDPI |
| Publisher Date | 2020-04-16 |
| Access Restriction | Open |
| Subject Keyword | Mathematics Operations Research and Management Science Loss Aversion Conditional Value-at-risk Supply Chain Coordination Contract Design |
| Content Type | Text |
| Resource Type | Article |
