scholarly journals The Optimal Strategies of Risk-Averse Newsvendor Model for a Dyadic Supply Chain with Financing Service

2017 ◽  
Vol 2017 ◽  
pp. 1-15 ◽  
Author(s):  
Jianxin Chen
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Financial Institution ◽  
Risk Measure ◽  
Wholesale Price ◽  
Optimal Strategies ◽  
Bank Loan ◽  
Risk Averse ◽  
Order Quantity ◽  
The Impact

This paper studies the budget-constrained newsvendor problem under risk aversion with financing service and builds a two-stage supply chain decision model on the order quantity and wholesale price. The budget-constrained retailer as a newsvendor faces a nonnegative random demand and the financial institution provides the loan service for the retailer who is risk-averse. This paper first explores the impact of risk aversion on the decisions in financial supply chain. Different from the existing research, we analyze how the financing service of bank loan impacts the risk-averse newsvendor’s decision and how the risk-averse behavior of the retailer influences the optimal strategies in supply chain with CVaR risk measure criterion. It is found that the order quantity decreases in the degree of risk aversion. The optimal order quantity is decreasing in initial budget, wholesale price, and interest rate. It is worth noting that the financing service can improve the profit of the supply chain system when the retailer has a low initial wealth. Finally, to compare with the existing results the theoretical analysis and numerical examples are also illustrated.

scholarly journals Optimal Decision of Deferred Payment Supply Chain considering Bilateral Risk-Aversion Degree

2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Liu Liang ◽  
Li Futou
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Risk Averse ◽  
Order Quantity ◽  
Initial Capital ◽  
Optimal Order Quantity ◽  
Degree Of Risk

This paper aims to fill up the gap that the previous research has never explored, the deferred payment supply chain with a risk-averse supplier. To this end, the conditional value-at-risk (CVaR) was adopted as a criterion to measure the influence of retailer’s deferred payment on supply chain performance. According to this criterion, the retailer’s optimal order quantity and the supplier’s optimal wholesale price per unit product were investigated under decentralized decision-making. Then, the existence of a unique optimal strategy was discussed for risk-averse supplier and retailer, and the values of risk-averse, initial capital, and wholesale price were calculated in detail. Finally, the theoretical results were testified through a numerical example. It is concluded that retailer’s optimal order quantity is negatively correlated with the wholesale price, initial capital, and degree of risk aversion, so that the retailer can benefit through proper risk aversion; the supplier’s expected profit decreases with the increase in the degree of risk aversion, yet the optimal wholesale price is determined by the degree of risk aversion of supplier and retailer. The research findings shed valuable new light on how to manage a supply chain involving risk-averse supplier and retailer.

scholarly journals The role of voucher sale in advance for a capital-constrained supply chain

2021 ◽  
Author(s):  
Haijun Wang ◽  
Guanmei Liu
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Optimal Choice ◽  
Bank Loan ◽  
Optimal Decision ◽  
Order Quantity ◽  
Credit Financing ◽  
The Impact

This paper studies voucher sale as an operational method to raise working capital for a supply chain, which consists of a supplier and a capital-constrained retailer. The retailer takes advantage of an online platform to sell vouchers and to get access to borrowing from a bank. By formulating a Stackelberg game model, we show the retailer's possible order quantities in the cases without and with bank loan and analyze the impact of voucher sale on the retailer's optimal choice of order quantity and the supplier's optimal wholesale price. We find that a smaller voucher's price induces the retailer to be more likely to order with loan from a bank while a larger voucher's value induces an order quantity with the loan more difficult to be repaid. In addition, if voucher's price is large, the supplier decides a wholesale price which leads the retailer not to borrow from a bank; and if voucher's price is small, the supplier's optimal decision is obtained by anticipating the retailer to borrow from a bank. We also analyze the impact of voucher sale in the presence of trade credit financing on the firms' decisions. The results show that the voucher's price should be small so that the retailer can repay the supplier if voucher's value is large; otherwise, the retailer either does not borrow from the supplier or may not repay the supplier. Besides, the supplier decides a wholesale price so that the retailer does not borrow or can repay the supplier, except that the voucher's value is large and the voucher's price is medium.

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 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.

scholarly journals Optimal strategies for a capital constrained contract-farming supply chain with yield insurance

2021 ◽  
Author(s):  
Ligang Shi ◽  
Tao Pang ◽  
Hongjun Peng
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Unit Area ◽  
Total Yield ◽  
Wholesale Price ◽  
Optimal Strategies ◽  
Farm Size ◽  
Agricultural Product ◽  
Contract Farming ◽  
Yield Insurance

We consider a capital-constrained contract-farming supply chain with a risk-averse farmer and a risk-neutral agro-dealer, where the farmer faces some yield uncertainty that can be covered by insurance. Using the Stackelberg model, we derive the optimal strategies on the insured level, production and wholesale price. The result shows that farmers with low risk aversion tend not to be insured, while those with high risk aversion tend to insure. Further analysis indicates that, as the degree of the farmer's risk aversion increases, the farm size decreases, but the yield per unit area and the wholesale price of the agricultural product increases.  In addition, yield insurance and premium subsidies can lead to a decrease of the yield per unit area. However, the expansion of the farm size can compensate for the inhibitory effect of the decrease of yield per unit area on the total yield, and thus the total yield increases. We also find that when the premium subsidy rate is low, the yield insurance's value to farmers is negative. Moreover, the yield insurance's value to farmers increases with respect to the bank's interest rate.

scholarly journals Inventory and Pricing Decisions Under Wholesale Price Contract with Social Preferences

2016 ◽  
Vol 4 (1) ◽  
pp. 68-86 ◽  
Author(s):  
Shuren Liu ◽  
Huina Chen ◽  
Lili Chen
Keyword(s):  
Supply Chain ◽  
Social Preferences ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Price Setting ◽  
Order Quantity ◽  
Pricing Decisions ◽  
Other Regarding ◽  
The Impact ◽  
Other Regarding Preferences

AbstractThis paper introduces the other-regarding preferences coefficients and studies the impact of social preferences on supply chain performance in the price-setting newsvendor setting. It is assumed that the stochastic demand is multiplicative. The manufacturer and retailer play a Stackelberg game. We analyze the impact of the decision-maker’s social preferences on the manufacturer’s optimal wholesale price, the retailer’s optimal retail price and order quantity, the supply chain member’s profits and utilities, and the supply chain system’s profits and utilities under three different cases that only the retailer, only the manufacturer and both are with social preferences. We show that a manufacturer, as a leader, should find a spiteful retailer, while a retailer, as a follower, should find a manufacturer with generous liability, to improve the entire supply chain. Finally, numerical examples are given to illustrate these results.

scholarly journals Pricing and Carbon Emission Reduction Decisions in a Supply Chain with a Risk-Averse Retailer under Carbon Tax Regulation

2020 ◽  
Vol 2020 ◽  
pp. 1-9 ◽  
Author(s):  
Yangang Feng ◽  
Jiaxin Shen ◽  
Xiaomei Li
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Tax Policy ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Carbon Tax ◽  
Wholesale Price ◽  
Optimal Decision ◽  
Risk Averse ◽  
Carbon Emission Reduction

Carbon tax is an emission regulation, which widely used to curb the carbon emissions generated from firms. In the context of carbon tax policy, firms need to determine an optimal carbon reduction level and optimal product prices. To address firms’ decision-making challenges, this paper considers a two-echelon supply chain consisting of a single manufacturer and a single retailer under carbon tax policy; it establishes a Stackelberg game model with a risk-averse retailer and a risk-neutral manufacturer who is the leader of the game. The paper studies the influence of the government’s carbon tax policy and retailer’s risk-averse attitude on the optimal decision of the supply chain. The result shows that when the retailer is risk aversion, the degree of risk aversion of the retailer is positively correlated with the wholesale price of the manufacturer and unit carbon emission reduction, and within a certain range of carbon emission reduction cost coefficient, it is positively correlated with the price of products; with the increase of the carbon tax rate imposed by the government, the retail price of unit products, the wholesale price of the manufacturer, and the carbon emission reduction of unit products also increase. Finally, the results are verified by numerical examples.

scholarly journals Green Supply Chain Game Model and Contract Design: Risk Neutrality vs. Risk Aversion

2021 ◽  
Author(s):  
Jianhu Cai ◽  
Huazhen Lin ◽  
Xiaoqing Hu ◽  
Minyan Ping
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Risk Tolerance ◽  
Retail Price ◽  
Green Supply Chain ◽  
Risk Averse ◽  
Equilibrium Solutions ◽  
Risk Neutral

Abstract This paper incorporates the players’ risk attitudes into a green supply chain (GSC) consisting of a supplier and a retailer. The supplier conducts production and determines the green level and wholesale price as a game leader, the retailer sells green products to consumers and determines the retail price as a follower. Equilibrium solutions are derived, and the influence of risk aversion on the GSC is examined. Our results show that, for the centralized GSC, risk aversion lowers the green level and the retail price; while for the decentralized GSC, risk aversion lowers the wholesale price and the retail price, but it may induce the supplier to increase the green level given a large risk tolerance of the supplier. Meanwhile, the risk-averse decentralized GSC may obtain more expected profit than the risk-neutral decentralized GSC. Furthermore, this paper designs a revenue-and-cost-sharing joint contract to coordinate the risk-neutral GSC, and such a contract can improve the risk-averse GSC under specific conditions.

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 Coordinating a Supply Chain with Risk-Averse Agents under Demand and Consumer Returns Uncertainty

2013 ◽  
Vol 2013 ◽  
pp. 1-10 ◽  
Author(s):  
Jian Liu ◽  
Yong He
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Risk Attitude ◽  
Price Policy ◽  
Optimal Order ◽  
Risk Averse ◽  
Coordination Problem ◽  
Consumer Returns ◽  
The Impact

This paper examines the optimal order decision in a supply chain when it faces uncertain demand and uncertain consumer returns. We build consumer returns model with decision-makers’ risk preference under mean-variance objective framework and discuss supply chain coordination problem under wholesale-price-only policy and the manufacturer’s buyback policy, respectively. We find that, with wholesale price policy, the supply chain cannot be coordinated whether the supply chain agents are risk-neutral or risk-averse. However, with buyback policy, the supply chain can be coordinated and the profit of the supply chain can be arbitrarily allocated between the manufacturer and the retailer. Through numerical examples, we illustrate the impact of stochastic consumer returns and the supply chain agents’ risk attitude on the optimal order decision.

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