Loss-averse preferences in a two-echelon supply chain with yield risk and demand uncertainty

Du, Shaofu; Zhu, Yujiao; Nie, Tengfei; Yu, Haisuo

doi:10.1007/s12351-016-0268-3

Cited by 21 publications

(17 citation statements)

References 41 publications

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“…Some studies have examined the impact of low carbon preferences, as well as the methods and attitudes toward the fossil fuel used, on the production process [3][4][5]. Meanwhile, some research has constructed a demand function to systematically characterize the relationship between low carbon preferences, price, and product demand, and to investigate the impact of low carbon preferences on demand and price [6][7][8]. In addition, some studies have examined the influence of consumers' preferences for low carbon on supply chain coordination and optimization decisions from different perspectives.…”

Section: Introductionmentioning

confidence: 99%

Supply-Chain Pricing and Coordination for New Energy Vehicles Considering Heterogeneity in Consumers’ Low Carbon Preference

2020

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Given consumers' willingness to pay different prices for new energy vehicles (NEVs) and traditional vehicles, we construct a utility model of ordinary and green consumers. We establish pricing game models for centralized and decentralized decisions in an NEV's supply chain in order to study the impact of changes in consumers' low carbon preference heterogeneity on supply chain pricing and member profit. The results show that consumers' low carbon preferences and the ratio of green consumers increases with the ex-factory and selling prices of NEVs. An increase in the percentage of green consumers under centralized decision-making will reduce the total profit of the supply chain. Manufacturers' profits under decentralized decision-making are greater than the dealers' profits, and the sum of the two members' profits under decentralized decision-making is less than the total profit of the supply chain under centralized decision-making. We design a revenue-sharing contract to eliminate the double marginal effect.

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Section: Introductionmentioning

confidence: 99%

Supply-Chain Pricing and Coordination for New Energy Vehicles Considering Heterogeneity in Consumers’ Low Carbon Preference

2020

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“…When both yield and demand are stochastic, Luo et al [20] study the supply chain coordination under three different contracts. Du et al [21] also consider the yield risk and demand uncertainty and study a supply chain with loss-averse supplier and retailer. Their optimal policies are obtained, respectively.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As mentioned above, the retailer's CVaR objective of utility is the expected utility when α = 0. In such a case, Q * reduces to the optimal order quantity that maximizes expected utility that is often studied in the supply chain models with loss-averse decision makers (e.g., [21][22][23]). Denote it by Q * 1 and then from (9) it satisfies…”

Section: Loss-averse Retailer's Ordering Policy Under the Combined Comentioning

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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“…Du et al investigated a two-echelon supply chain under the assumption that a supplier with yield randomness and a retailer with demand uncertainty are loss-averse. They found that the optimal order quantity of retailer with loss aversion may increase in wholesale price and decrease in retail price [42].…”

Section: Traditional Supply Chain Management With Loss-averse Membersmentioning

confidence: 99%

Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

Feng

Tan

2019

Mathematics

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The consumer environmental awareness promotes green manufacturing and the behavioral preferences of members become prevailing in supply chain management. To promote further development of green supply chains, a two-echelon green supply chain with a manufacturer and a retailer is considered, where the manufacturer is loss-averse and the retailer is risk-neutral. We use a Stackelberg game to investigate the impacts of loss aversion and green efficiency coefficient on retail price, wholesale price, green degree, profits of members, and profit of the green supply chain under the assumption that manufacturer’s reference point of loss aversion is equal to the subgame perfect equilibrium partition. It is shown that, in the centralized decision-making setting (CDS), green degree and profit of the green supply chain are higher than those in the decentralized decision-making setting (DDS), while in the decentralized decision-making setting with a loss-averse manufacturer (DDS-LAM) loss aversion of manufacturer further decreases green degree and profit of green supply chain. It is also found that profits of the manufacturer and the retailer decrease with levels of loss aversion of manufacturer. Furthermore, it is also shown that wholesale price and retail price in the three decision-making settings depend on the green efficiency coefficient. Wholesale price and retail price in DDS-LAM are always the lowest (highest) if the green efficiency coefficient is sufficiently high (low). Finally, executing a greening cost-sharing contract can improve chain members’ profits if the retailer shares an appropriate proportion with the loss-averse manufacturer.

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Loss-averse preferences in a two-echelon supply chain with yield risk and demand uncertainty

Cited by 21 publications

References 41 publications

Supply-Chain Pricing and Coordination for New Energy Vehicles Considering Heterogeneity in Consumers’ Low Carbon Preference

Supply-Chain Pricing and Coordination for New Energy Vehicles Considering Heterogeneity in Consumers’ Low Carbon Preference

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

Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

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