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

Luo, Chunlin; Tian, Xin; Mao, Xiaobing; Qiangguo, Cai

doi:10.1142/s0217595918400080

Cited by 13 publications

(9 citation statements)

References 30 publications

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“…For example, Zhang et al (2020b) examine the effect of risk aversion on the retailer's optimal order decision with backlogging. A buy-back contract was proposed by Luo et al (2018) to coordinate a supply chain consisting of a risk-neutral manufacturer and a risk-averse retailer.…”

Section: Supply Chain Decisions and Coordination With Risk Aversionmentioning

confidence: 99%

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Stackelberg equilibrium strategies and coordination of a low‐carbon supply chain with a risk‐averse retailer

Yuan

et al. 2022

Int Trans Operational Res

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This paper examines the impact of retailer's risk aversion on the equilibrium strategies and channel coordination in the presence of consumers’ low‐carbon preference. The stochastic market demand is dependent on the carbon reduction level, advertisement for low‐carbon products and their interplay. The mean‐CVaR criterion is adopted to measure the risk‐averse retailer's objective. The Stackelberg equilibrium carbon reduction level, order quantity and advertising level are derived. We find that the manufacturer's investment in carbon reduction can encourage the retailer to put more effort into advertising and increase the order quantity. All of the carbon reduction levels, advertising levels, and order quantity decrease when the retailer becomes conservative. An option and cost‐sharing combined contract is proposed to coordinate the supply chain. We prove that if the trade‐off coefficient (the weight that the retailer puts on expected profit) is higher than a threshold, the supply chain can achieve coordination even though the retailer's degree of risk aversion is extremely high. If the trade‐off coefficient is below the threshold, the supply chain can be coordinated only if the retailer's degree of risk aversion is not very high. The retailer's risk attitude and option price play significant roles in the profit allocation of the supply chain under coordination. Our numerical examples show that the retailer benefits from a higher degree of risk aversion or a higher option price under coordination.

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Section: Supply Chain Decisions and Coordination With Risk Aversionmentioning

confidence: 99%

“…A buy‐back contract was proposed by Luo et al. (2018) to coordinate a supply chain consisting of a risk‐neutral manufacturer and a risk‐averse retailer.…”

Section: Literature Reviewmentioning

confidence: 99%

Stackelberg equilibrium strategies and coordination of a low‐carbon supply chain with a risk‐averse retailer

Yuan

et al. 2022

Int Trans Operational Res

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“…Choi showed that the retailer's risk aversion behavior plays a key role in the optimal decision-making of each subject of the supply chain [38]. Luo proved that the risk-averse retailer in buyback contracts would reduce the order quantity, leading to the reduction of supply chain performance [39]. Xie analyzed the effect of decision-makers' risk attitude on different supply chain coordination contracts, and found that risk parameters played a key role in contract design [40].…”

Section: Risk Aversion In the Supply Chainmentioning

confidence: 99%

Pricing and Financing Strategies for a Green Supply Chain With a Risk-Averse Supplier

Kang

Gao

et al. 2021

IEEE Access

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This study investigated a green supply chain comprising a single supplier with financial constraints and a single retailer, while also considering the supplier's degree of risk aversion. A supplierretailer Stackelberg game model was established under different financing situations, namely, bank financing and retailer's advance payment, and optimal decisions were derived for both the supplier and the retailer. The analysis examined the influence of the degree of the supplier's risk aversion, pricing and financing strategies on optimal decisions. The results show that high supplier risk aversion is not conducive to the supply chain green development. When the supplier has less initial capital, the strategy of advance payment provided by the retailer will be prioritized within the supplier's financial constraints. When the supplier's initial capital is more, he should use the initial capital for production. The study's consideration of the supply chain green level as an endogenous variable, as well as of the supplier's risk aversion, contributes to its novelty.

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“…Xie et al [29] further extend their model by using mean-CVaR as the loss-averse retailer's criterion and investigate the supply chain coordination. Luo et al [30] use buyback contract to study the supply chain coordination under mean-CVaR criterion, and investigate the effect of allocation rule in the platform selling model.…”

Section: Literature Reviewmentioning

confidence: 99%

Supply Chain Coordination with a Loss-Averse Retailer and Combined Contract

et al. 2020

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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.

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

Cited by 13 publications

References 30 publications

Stackelberg equilibrium strategies and coordination of a low‐carbon supply chain with a risk‐averse retailer

Stackelberg equilibrium strategies and coordination of a low‐carbon supply chain with a risk‐averse retailer

Pricing and Financing Strategies for a Green Supply Chain With a Risk-Averse Supplier

Supply Chain Coordination with a Loss-Averse Retailer and Combined Contract

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