Operations Research Transactions ›› 2020, Vol. 24 ›› Issue (3): 87-100.doi: 10.15960/j.cnki.issn.1007-6093.2020.03.007

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Service decision and coordination contracts of supply chain with mean-CVaR retailer

YU Haibo, NA Na*, TANG Zhongjun   

  1. School of Economics and Management, Beijing University of Technology, Beijing 100124, China
  • Received:2017-10-11 Published:2020-09-05

Abstract: In this paper, we study the supply chain joint decision of sale price, product quality and service level when the retailer is risk preference. Retailer's risk preference can be characterized by the mean-CVaR criterion, which include risk aversion, risk neutrality, risk pursuing and loss avoidance. Firstly, we get the optimal decision and optimal profit (expected utility) under the centralized system and decentralized system which service is provided by manufacturer (model one) and retailer (model two) separately. Secondly, the results show that the supply chain can be coordinated under the cost-sharing contract when the retailer is risk averse. Thirdly, comparing the optimal profit (expected utility) after coordination of model one and model two, we find that providing service has no effect on the manufacturer's profit, while the retailer owns more expected utility if it offers service. Finally, numerical examples demonstrate the results.

Key words: mean-CVaR, risk preference, coordination contracts, service decision

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