Supply chain coordination with trade credit under the CVaR criterion

Chen, Zhiming; Yuan, Kunwen; Zhou, Shaorui

doi:10.1080/00207543.2018.1543966

Cited by 46 publications

(26 citation statements)

References 56 publications

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“…e retailer faces a random demand and the supplier provides the trade credit for the risk-averse retailer with budget constraints. Chen et al [24] supposed default happens with a random probability and considered supply chain coordination with trade credit under the CVaR criterion in the perspective of risk control. Chen and Zhou [23] do not consider the time value of capital while our paper does.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Chen and Zhou [23] do not consider the time value of capital while our paper does. Chen et al [24] mainly considered default probability of trade credit to optimize the lot-sizing decision for the creditor, while our paper mainly discusses the changes that trade credit brings towards the decisions of both the manufacturer and the retailer. Furthermore, both of these two papers do not consider the issue of supply chain coordination, whereas we do.…”

Section: Literature Reviewmentioning

confidence: 99%

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Trade Credit and Revenue Sharing of Supply Chain with a Risk-Averse Retailer

Liu

Chen

et al. 2021

Mathematical Problems in Engineering

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In this paper, we develop three supply chain game models, i.e., the basic model, the single trade credit model, and the trade credit and revenue sharing collaboration model. Conditional value-at-risk (CVaR) criterion is used as the measure of risk assessment in these models. We analyze the optimal decisions in the centralized and decentralized situations, respectively, and verify that single trade credit cannot coordinate the supply chain. However, the collaboration contract can coordinate the supply chain. Furthermore, this paper explores the influence of risk-aversion factor, trade credit period, revenue sharing coefficient, and other parameters on the optimal decisions and studies the feasible range of Pareto improvement in the collaborative model. In numerical experiments, the results show that the decisions and profits of both the manufacturer and the retailer reply on the degree of the risk aversion, the trade credit period, and the revenue sharing coefficient. The collaborative contract effectively improves supply chain performance and achieves a ‘win-win’ situation for the supply chain members. In addition, we also consider two extensions for our research. One extension shows that the collaborative contract of trade credit and buyback can also coordinate the supply chain in a certain range. The other extension considers the optimal decision of a risk-averse manufacturer with CVaR.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Trade Credit and Revenue Sharing of Supply Chain with a Risk-Averse Retailer

Liu

Chen

et al. 2021

Mathematical Problems in Engineering

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“…Chen et al. (2019) consider the default risk brought by trade credit in a supply chain and derive the risk‐averse manufacturer's optimal production quantity under the CVaR criterion. Shen et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Financing a risk‐averse manufacturer in a pull contract: early payment versus retailer investment

Yang

Fang

Zhang

2020

Int Trans Operational Res

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This work focuses on a two‐level supply chain with a pull contract, where the retailer acts as a leader and the capital‐constrained manufacturer as a follower who undertakes the inventory risk. In the presence of demand uncertainty, the manufacturer is risk‐averse, and the risk is measured by the semideviation method. To finance the capital‐constrained manufacturer, we investigate two collaborative supply chain finance schemes: retailer's early payment (EP) financing and retailer investment (RI) financing. We characterize the manufacturer's optimal production quantity and the retailer's wholesale price under EP and RI. Under the two financing schemes, the manufacturer obtains a higher utility when his risk aversion degree is moderate, while the retailer is worse off in the presence of a higher risk aversion degree. Under RI, both optimal production quantity and wholesale price decrease in the proportion of dividends shared by the manufacturer. For the manufacturer (or the retailer or the total supply chain), we derive the associated parameter region in which RI achieves a higher performance than EP. When RI and EP are available, there exists a common parameter region in which RI is preferred by the manufacturer, retailer, and total supply chain.

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“…They study the performance of the contract and its stability. Chen et al [26] incorporate default probability into the supply chain. They show quantity discount contract can coordinate the chain if the risk-averse manufacturer's confidence level is small enough.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Similarly, if λ = 1, then Q * reduces to the optimal order quantity that maximizing CVaR of profit that is often studied in the supply chain models under CVaR criterion (e.g., [25][26][27]). Denote it by Q * 2 and then 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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Supply chain coordination with trade credit under the CVaR criterion

Cited by 46 publications

References 56 publications

Trade Credit and Revenue Sharing of Supply Chain with a Risk-Averse Retailer

Trade Credit and Revenue Sharing of Supply Chain with a Risk-Averse Retailer

Financing a risk‐averse manufacturer in a pull contract: early payment versus retailer investment

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

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