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

Liu, Wei; Song, Shiji; Qiao, Ying; Zhao, Han

doi:10.3390/math8040586

Cited by 7 publications

(4 citation statements)

References 37 publications

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“…Under the carbon emissions tax regulation, Zhao et al [38] derived that the call option contract can benefit the risk-neutral supplier and one risk-averse retailer, improve the supply chain performance, and decrease invalid carbon emissions. Liu et al [39] showed that the combined contract can coordinate the supply chain, and find that when the confidence level is below a threshold, the unique coordinating wholesale price exists.…”

Section: Literature Reviewmentioning

confidence: 99%

Supply Chain Coordination with a Risk-Averse Retailer and the Call Option Contract in the Presence of a Service Requirement

et al. 2021

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This paper investigates a supply chain consisting of a single risk-neutral supplier and a single risk-averse retailer with the call option contract and a service requirement, where the retailer’s objective is to maximize the Conditional Value-at-Risk about profit. The optimal ordering quantity of the retailer and the optimal production quantity of the supplier are derived with the call option contract in the presence of a service requirement. Furthermore, by investigating the effect of the service level and the risk aversion on the supply chain, it is found that the retailer’s optimal Conditional Value-at-Risk is non-increasing in the service requirement and increasing in the risk aversion, while the supplier’s optimal expected profit is non-decreasing in the service and decreasing in the risk aversion. In addition, this paper demonstrates the impact of contract parameters on the service-constrained supply chain, and finds that the retailer’s optimal Conditional Value-at-Risk may be increasing, constant or decreasing in unit exercise price. Finally, with the call option contract, a distribution-free coordination condition is derived to achieve the Pareto improvement under Conditional Value-at-Risk criterion in the presence of a service requirement.

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Section: Literature Reviewmentioning

confidence: 99%

Supply Chain Coordination with a Risk-Averse Retailer and the Call Option Contract in the Presence of a Service Requirement

et al. 2021

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“…Further, Lee et al (2015) verified that a buyer's optimal option reserving decision in an option contract can be heavily influenced by the loss aversion behavior. Then, a great number of papers have been devoted to studying a loss-averse retailer's procurement decision (Herweg, 2013;Neumann and Bockenholt, 2014;Xu et al, 2017Xu et al, , 2018Xu et al, , 2019Li and Li, 2018;Liu et al, 2020;Zhang et al, 2022).…”

Section: Introductionmentioning

confidence: 99%

Retailers’ optimal ordering policies for a dual-sourcing procurement

Chan

2023

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PurposeOptimal ordering decision for a retailer in a dual-sourcing procurement is an important research area. The main purpose of this paper is to explore a loss-averse retailer’s ordering decision in a dual-sourcing problem.Design/methodology/approachFor a loss-averse retailer, the study obtains the optimal ordering decision to maximize expected utility. Based on sensitivity analysis, the properties of the optimal ordering decision are well discussed.FindingsUnder the optimal ordering quantity that maximizes expected loss aversion utility, the relevant expected profit of a retailer turns to be smaller under a bigger loss aversion coefficient. For this point, a retailer needs to balance between expected loss aversion utility maximization and expected profit maximization in deciding the optimal ordering policy in a dual-sourcing problem.Originality/valueThis paper reveals the influence of loss aversion on a retailer’s ordering decision in a dual-sourcing problem. Managerial insights are suggested to devise the optimal ordering policy for retailers in practice.

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“…Discrete Dynamics in Nature and Society [26] designed a contract that combined buyback and quantity fexibility to coordinate the supply chain with lossaverse retailers. Xie et al [27] investigated a single-period two-echelon supply chain where the loss-averse retailer's marketing eforts infuence the fnal market demand.…”

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Dual-Channel Supply Chain Coordination with Loss-Averse Consumers

Zhang

Ying

2023

Discrete Dynamics in Nature and Society

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Most studies on supply chain coordination assume that consumers are rational. However, with the development of e-commerce, consumer-bounded rationality has become an important issue with respect to supply chain coordination. Based on the assumption that some consumers are loyal to the offline shop and others are reference-dependent, this article examines the mechanism of vertical restraints and their competitive effects. This research study found that compared with the assumption of rational consumers used in previous literature, vertical restraints help internalize the “channel price gap externality” when consumers are loss averse. When separately operating, the offline shop will set a higher price due to its consumers’ higher loyalty and willingness to pay. However, given the positive externality of this price to the online retail sales, the offline price is still lower than the level under vertical integration. When the upstream manufacturer achieves supply chain coordination with vertical restraint contracts, the channel price gap externality is internalized, and the channel price gap expands to stimulate loss-averse consumers’ purchasing decisions.

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

Cited by 7 publications

References 37 publications

Supply Chain Coordination with a Risk-Averse Retailer and the Call Option Contract in the Presence of a Service Requirement

Supply Chain Coordination with a Risk-Averse Retailer and the Call Option Contract in the Presence of a Service Requirement

Retailers’ optimal ordering policies for a dual-sourcing procurement

Dual-Channel Supply Chain Coordination with Loss-Averse Consumers

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