scholarly journals Risk-averse preferences in a dual-channel supply chain with trade credit and demand uncertainty

2020 ◽  
Author(s):  
Chong Zhang ◽  
Yaxian Wang ◽  
Lifan Zhang
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Demand Uncertainty ◽  
Trade Credit ◽  
Channel Structure ◽  
Coordination Mechanism ◽  
Risk Averse ◽  
Market Demand ◽  
Dual Channel ◽  
The Impact

Though it is an important means for enterprises to increase market demand and boost profits, trade credit can carry risks. Besides, risks also result from uncertain market demand. Decision-makers' attitude towards risk will influence the decisions of enterprises, so it is meaningful to study the impact of risk preference on supply chain performance. This paper explores the effect of risk-averse preferences of the manufacturer or retailer on their delayed payment periods decision and utility when the dual-channel structure is adopted. Customer demands are uncertain and depend on the delayed payment periods that the manufacturer and the retailer may offer to them. Mean-variance model is used to describe the risks due to uncertain demand, and establishes supply chain utility models under four decision-making situations (both are risk-neutral; only the retailer is risk-averse; only the manufacturer is risk-averse; both are risk-averse). According to our study, supply chain members with higher risk aversion are more inclined to prolong delayed payment period. The retailer’s risk aversion is adverse for her utility, but beneficial to the manufacturer’s utility, thus a new coordination mechanism is proposed to achieve coordinate when only the retailer is risk averse. We prove that the contract can effectively improve the utility of the whole supply chain. This paper conduces to enrich the emerging literature on relating risk aversion preferences to trade credit period decision and coordination behavior under dual-channel environment.

scholarly journals Research on the Maritime Logistics Pricing Model of Risk-Averse Retailer-Dominated Dual-Channel Supply Chain

2018 ◽  
Vol 25 (s2) ◽  
pp. 107-116
Author(s):  
Qing Fang ◽  
Zeping Tong ◽  
Liang Ren ◽  
Ao Liu
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Risk Averse ◽  
Market Demand ◽  
Maritime Logistics ◽  
Decentralized Supply Chain ◽  
Dual Channel ◽  
On Line ◽  
Dual Channel Supply Chain

Abstract Price decision is studied in a risk-averse retailer-dominated dual-channel supply chain, which consisting of one manufacturers and one retailer with both off-line and on-line channels. Firstly, two mean-variance models in centralized and decentralized supply chain are established. Secondly, the optimal solutions under the two decision modes are compared and analyzed. The results shows that the price of dual-channel of retailer decreased with the increase of retailers’ risk- aversion coefficient and the standard deviation of the fluctuation of market demand, while the wholesale price changes is on the contrary; in addition, when the market demand is greater than a certain value, the prices of dual channel are correspondingly higher in decentralized supply chain than in centralized supply chain, and vice versa. In addition, when the retailer’s risk aversion is in a certain interval, the expected utility of the whole supply chain is greater in centralized supply chain than in decentralized decision, and vice versa. Finally, a numerical example is given to verify the above conclusions.

Coordinating Supply Chain with Buy-Back Contracts in the Presence of Risk Aversion

2018 ◽  
Vol 35 (02) ◽  
pp. 1840008 ◽  
Author(s):  
Chunlin Luo ◽  
Xin Tian ◽  
Xiaobing Mao ◽  
Qiang Cai
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Value At Risk ◽  
Performance Measure ◽  
Expected Profit ◽  
Conditional Value At Risk ◽  
Allocation Rule ◽  
Risk Averse ◽  
Buy Back ◽  
The Impact

This paper addresses the operational decisions and coordination of the supply chain in the presence of risk aversion, where the risk averse retailer’s performance is measured by a combination of the expected profit and conditional value-at-risk (CVaR). Such performance measure reflects the desire of the retailer to maximize the expected profit on one hand and to control the downside risk of the profit on the other hand. The impact of risk aversion on the supply chain’s decision and performance is also explored. To overcome the inefficiency due to the double marginalization and the aggravation resulting from risk aversion, we investigate the buy-back contract to coordinate the supply chain. Such contract can largely increase the supply chain’s profit, especially when the retailer is more risk averse. Lastly, we extend such risk measure to the widely-used business model nowadays — platform selling model, and explore the impact of the allocation rule on the manufacturer’s decision.

scholarly journals Coordination Mechanism of Dual-Channel Supply Chains Considering Retailer Innovation Inputs

2021 ◽  
Vol 13 (2) ◽  
pp. 813 ◽  
Author(s):  
Wensheng Yang ◽  
Yinyuan Si ◽  
Jinxing Zhang ◽  
Sen Liu ◽  
Andrea Appolloni
Keyword(s):  
Sustainable Development ◽  
Supply Chain ◽  
Supply Chains ◽  
Stackelberg Game ◽  
Operational Efficiency ◽  
Coordination Mechanism ◽  
Market Demand ◽  
Dual Channel ◽  
Physical Channel ◽  
Retail Prices

In response to the online channels established by manufacturers, physical retailers are starting to offer innovative services, which will intensify conflicts between manufacturers and retailers. Considering that the conflict will affect the operation efficiency and sustainable development of the supply chain, the coordination mechanism of a dual-channel supply chain has been established. In this study, we construct the Stackelberg game model based on consumer utility theory to analyze the complex mechanism of retailers’ innovation input level affecting supply chain operation and design the double coordination mechanism. The results show that: (1) an optimal combination of wholesale prices, retail prices and innovation input levels can optimize the operational efficiency of the supply chain, (2) Noncooperation among channel members affects the retailer’s product pricing, decreases the market share of the physical channel and increases the market demand of manufacturers, (3) The dual coordination mechanism can alleviate channel conflicts, which can improve the operational efficiency of the supply chain. This study provides several insights on the theory of organizational coordination and sustainable development in conflicts of dual-channel supply chains.

scholarly journals Investigating Inventory Strategy Under Demand Distribution Fluctuation in Dual-Channel Supply Chain

2021 ◽  
Vol 8 ◽  
Author(s):  
Nai-Ru Xu ◽  
Jie Cheng ◽  
Zheng-Qun Cai
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Distribution System ◽  
Demand Uncertainty ◽  
Management Problem ◽  
Market Demand ◽  
Supply Chain System ◽  
Demand Distribution ◽  
Dual Channel ◽  
Dual Channel Supply Chain

When manufacturers construct a dual-channel distribution system, which includes online and offline sales channels, they need to solve the inventory management problem to ensure supply and reduce inventory costs of the supply chain system. The dual-channel supply chain is the research object, and the inventory decision model is designed to achieve optimal profit when market demand is divided into online and offline demands. The results of the numerical analysis and simulations, conducted using MATLAB, indicate that both the manufacturer and the retailer increase their inventories and that their profits decrease when demand uncertainty increases. Besides, the increase in the online demand ratio causes the increase in the manufacturer’s inventory and reduces the profits of the retailer and the entire supply chain.

Optimal Independent Pricing Strategies of Dual-Channel Supply Chain Based on Risk-Aversion Attitudes

2018 ◽  
Vol 35 (02) ◽  
pp. 1840004 ◽  
Author(s):  
Zheng Liu ◽  
Qi Xu ◽  
Kun Yang
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Risk Attitude ◽  
Substitution Effect ◽  
Pricing Strategies ◽  
Supply Chain System ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
The Impact ◽  
Independent Model

Dual-channel supply chain system, channel optimization is influenced by channel attitude toward risk, in which risk is classified as general risk and interruption risk. To consider lead time may bring out supply conflicts, substitution effect of online channel and ratio of promotional cost are introduced and an independent model is developed. Based on that, the impact of interruption risk under risk-aversion attitude on both channels is further studied. Finally, it is proved how the risk attitude influences pricing and profit strategy.

scholarly journals Optimal Channel Strategy for a Fresh Produce E-Commerce Supply Chain

2021 ◽  
Vol 13 (11) ◽  
pp. 6057
Author(s):  
Qian Zheng ◽  
Manman Wang ◽  
Feng Yang
Keyword(s):  
Supply Chain ◽  
Channel Model ◽  
Fresh Produce ◽  
Selection Strategy ◽  
Market Demand ◽  
Strategy Research ◽  
The Sustainable Development ◽  
Dual Channel ◽  
Offline Channels ◽  
The Impact

As an increasing number of firms move to omnichannel operation for business sustainability, it is also necessary for fresh produce firms to adopt an omnichannel model by integrating online and offline channels. We focus on a fresh produce supply chain consisting of a supplier who sells online directly and a physical store retailer. The purpose of this paper is to explore the optimal channel selection strategy considering the fresh-keeping efforts of supply chain members. Specifically, we examine the conditions under which the supply chain members should cooperate to adopt the deliver-from-store (DFS) model and further investigate the impact of consumers’ freshness sensitivity and offline hassle cost on supply chain members’ sales model options. Several important conclusions are shown as follows. First, the retailer’s profit increases with the increasing freshness sensitivity in the dual-channel model, while it decreases if consumers are sufficiently sensitive to freshness in the DFS model. Second, if adopting the DFS model, online demand and total market demand expand, and the performance of the supplier and the retailer heavily depends on the size of the commission rate. Third, there always exists a win–win situation with an appropriate range of commission rate when the consumer’s hassle cost is large. This paper contributes to the omnichannel strategy research of fresh produce supply chain management and the results provide management insights for the sustainable development of the fresh produce industry in the omnichannel retailing environment.

scholarly journals Impact of Retailer’s Vertical and Horizontal Fairness Concerns on Manufacturer’s Online Channel Mode

2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Xuemei Zhang ◽  
Chenhao Ma ◽  
Haoran Chen ◽  
Guohu Qi
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Channel Structure ◽  
Direct Selling ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Online Channel ◽  
Channel Mode ◽  
Dual Channel Supply Chain ◽  
The Impact

This paper investigates a dual-channel supply chain consisting of a manufacturer and a retailer, where the retailer exhibits vertical and horizontal fairness concerns. The manufacturer or the retailer direct selling and e-commerce platform agency selling modes are employed to characterize the impact of retailer’s fairness concerns on the online channel mode strategy. Results show that the retailer’s fairness concerns only affect the wholesale price and online channel mode strategy. Without the retailer’s fairness concerns, the manufacturer direct selling mode is the best strategy for the manufacturer, which harms the retailer’s utility. With the retailer’s fairness concerns, the manufacturer may choose the manufacturer direct selling or e-commerce platform agency selling mode. When the fairness concern parameters meet a certain range, the e-commerce platform agency selling mode strategy is better for the supply chain members, which can solve the interest conflict between supply chain members. These research findings help dual-channel supply chain members understand how to choose the channel structure strategy to balance the supply chain members’ interests by considering fairness concerns.

scholarly journals Impact of Risk Aversion on Price and Quality Decisions under Demand Uncertainty via the CARA Utility Function

2014 ◽  
Vol 2014 ◽  
pp. 1-15 ◽  
Author(s):  
Qinqin Li ◽  
Zhiying Liu ◽  
Yi He
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Demand Uncertainty ◽  
Absolute Risk ◽  
Wholesale Price ◽  
Retail Price ◽  
Cost Coefficient ◽  
Stackelberg Model ◽  
Cara Utility ◽  
The Impact

This paper investigates optimal price and quality decisions of a manufacturer-retailer supply chain under demand uncertainty, in which players are both risk-averse decision makers. The manufacturer determines the wholesale price and quality of the product, and the retailer determines the retail price. By means of game theory, we employ the constant absolute risk aversion (CARA) function to analyze two different supply chain structures, that is, manufacturer Stackelberg model (MS) and retailer Stackelberg model (RS). We then analyze the results to explore the effects of risk aversion of the manufacturer and the retailer upon the equilibrium decisions. Our results imply that both the risk aversion of the manufacturer and the retailer play an important role in the price and quality decisions. We find that, in general, in MS and RS models, the optimal wholesale price and quality decrease with the risk aversion of the manufacturer but increase with the risk aversion of the retailer, while the retail price decreases with the risk aversion of the manufacturer as well as the retailer. We also examine the impact of quality cost coefficient on the optimal decisions. Finally, numerical examples are presented to illustrate the different degree of effects of players’ risk aversion on equilibrium results and to compare results in different models considered.

scholarly journals Trade Credit and Revenue Sharing of Supply Chain with a Risk-Averse Retailer

2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
Caiyun Liu ◽  
Kebing Chen ◽  
Mingxia Li ◽  
Haijie Zhou
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Value At Risk ◽  
Trade Credit ◽  
Revenue Sharing ◽  
Conditional Value At Risk ◽  
Optimal Decision ◽  
Risk Averse ◽  
Credit Period ◽  
Optimal Decisions

In this paper, we develop three supply chain game models, i.e., the basic model, the single trade credit model, and the trade credit and revenue sharing collaboration model. Conditional value-at-risk (CVaR) criterion is used as the measure of risk assessment in these models. We analyze the optimal decisions in the centralized and decentralized situations, respectively, and verify that single trade credit cannot coordinate the supply chain. However, the collaboration contract can coordinate the supply chain. Furthermore, this paper explores the influence of risk-aversion factor, trade credit period, revenue sharing coefficient, and other parameters on the optimal decisions and studies the feasible range of Pareto improvement in the collaborative model. In numerical experiments, the results show that the decisions and profits of both the manufacturer and the retailer reply on the degree of the risk aversion, the trade credit period, and the revenue sharing coefficient. The collaborative contract effectively improves supply chain performance and achieves a ‘win-win’ situation for the supply chain members. In addition, we also consider two extensions for our research. One extension shows that the collaborative contract of trade credit and buyback can also coordinate the supply chain in a certain range. The other extension considers the optimal decision of a risk-averse manufacturer with CVaR.

Sign in / Sign up

Export Citation Format

Share Document