Risk-aversion information in a supply chain with price and warranty competition

Cai, Keyuan; He, Zhen; Lou, Yaqi; He, Shiwei

doi:10.1007/s10479-019-03386-w

Cited by 22 publications

(10 citation statements)

References 63 publications

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“…Zhou et al [ 18 ] proposed a game-theoretical model to study the price competition between two recyclers of electrical and electronic equipment waste. Cai et al [ 19 ] studied the price and warranty competition between two risk-averse retailers by assuming that the retailers’ risk-aversion levels are private information. Shalouhi et al [ 20 ] studied Nash and Stackelberg models of competition problems in two pharmaceutical supply chains in which both exclusive retailer and manufacturer are included.…”

Section: Literature Reviewmentioning

confidence: 99%

Robust competitive facility location model with uncertain demand types

2022

PLoS ONE

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In competitive settings, firms locate their facilities according to customers’ behavior to maximize their market share. A common behavior is consuming from different motivations: one is for convenient demand, and the other is for quality demand. In this behavioral pattern, consumers patronize facilities within convenience for some demands, and patronize high quality facilities beyond convenience range for other demands. This behavior has never been included in competitive facility location problems. Given several other companies’ facilities in the market offering similar products or services, we study how a new entrant company can locate facilities based on this customer behavior to maximize its market share. A two-level robust model for the new entrant company is proposed to locate its facilities by taking into account the uncertainty of the types of customers’ demands. For medium size problems, we propose an equivalent mixed binary linear programming to obtain exact solutions. For large size problems, an exact algorithm (GCKP-A) for solving the inner-level model is given first by exploring the optimal solution. Then a heuristic algorithm is proposed by imbedding (GCKP-A) and 2-opt strategy into the framework of the improved ranking-based algorithm. The performance of the proposed heuristic algorithm is checked for different size problems. The sensitivity analysis of a quasi-real example shows that: (1) in most cases, the uncertainty between two types of demands does not affect the location scheme; (2) the convenience range, the quality range and the quality threshold play an important role in the market share of the new entrant company.

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Section: Literature Reviewmentioning

confidence: 99%

Robust competitive facility location model with uncertain demand types

2022

PLoS ONE

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“…In this section, we consider the presence of blockchain so that the high-tech manufacturer’s degree of risk aversion can be accurately estimated (Cai et al, 2020 ; Choi et al, 2020b ) and known by the government. Note that blockchain has many different functions, including smart contracting, cryptocurrency, etc.…”

Section: Basic Modelmentioning

confidence: 99%

Values of blockchain for risk-averse high-tech manufacturers under government’s carbon target environmental taxation policies

Choi

2022

Ann Oper Res

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Today, high-tech industries such as consumer electronics commonly face government rules on carbon emissions. Among the rules, carbon emission tax as well as extended producer responsibility (EPR) tax are two important measures. Using blockchain, the policy makers can better determine the carbon target environmental taxation (CTET) policy with accurate information. In this paper, based on the mean-variance framework, we study the values of blockchain for risk-averse high-tech manufacturers who are under the government’s CTET policy. To be specific, the government first determines the optimal CTET policy. The high-tech manufacturer then reacts and determines its optimal production quantity. We analytically prove that the CTET policy simply relies on the setting of the optimal EPR tax. Then, in the absence of blockchain, we consider the case in which the government does not know the manufacturer’s degree of risk aversion for sure and then derive the expected value of using blockchain for the high-tech manufacturers. We study when it is wise for the high-tech manufacturer and the government to implement blockchain. To check for robustness, we consider in two extended models respectively the situations in which blockchain incurs non-trivial costs as well as having an alternative risk measure. We analytically show that most of the qualitative findings remain valid.

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“…Risk aversion is an important behavior in the field of supply chain management (Cai et al., 2019; Choi et al., 2019a). There has been abundant work on agents’ risk‐averse behaviors.…”

Section: Literature Reviewmentioning

confidence: 99%

“…MV method can not only consider risk aversion in the optimization objective but also assess the profit risk of associated operations (Choi et al., 2019b). Numerous studies have used MV to analyze risk‐averse agents’ decisions (Yan et al., 2018; Cai et al., 2019; Choi et al., 2019a). However, MV is limited in treating desirable and undesirable outcomes equally (Ma et al., 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing decisions with different time sequences in a cross‐border dual‐channel supply chain

Xue

2021

Int Trans Operational Res

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This paper investigates pricing decisions with different time sequences in a cross‐border dual‐channel supply chain, in which the manufacturer produces products in country A and sells them to country B via a retail channel and an online channel. Meanwhile, we design three scenarios, the manufacturer‐led earlier scenario, the manufacturer‐led later scenario, and the retailer‐led scenario, to analyze the effects of time sequences when the manufacturer is risk neutral or risk averse. Through modeling and analysis, it is concluded that whether the manufacturer is risk averse or not, the manufacturer prefers the manufacturer‐led earlier scenario and the retailer's preference is the retailer‐led scenario. That is, when considering the time sequences, the players are encouraged to make all decisions in the first stage. Moreover, this paper analyzes the effects of the exchange rate and delivery lead time on the players’ pricing decisions. The theoretical and numerical analyses also show that the effects of an increasing exchange rate on the profits of the manufacturer and retailer are associated with the cost of the online channel. Additionally, while reducing the delivery lead time can attract customers, a moderate delivery lead time is more advantageous for the manufacturer. Finally, we further verify the robustness of the impacts of time sequences when the manufacturer is risk averse. Interestingly, if the cost of the online channel is higher, then the risk‐averse behavior benefits the retailer.

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Risk-aversion information in a supply chain with price and warranty competition

Cited by 22 publications

References 63 publications

Robust competitive facility location model with uncertain demand types

Robust competitive facility location model with uncertain demand types

Values of blockchain for risk-averse high-tech manufacturers under government’s carbon target environmental taxation policies

Pricing decisions with different time sequences in a cross‐border dual‐channel supply chain

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