Open AccessAuction and contracting mechanisms for channel coordination with consideration of participants' risk attitudes
Author(s) -
Cheng Ma,
Y. C. E. Lee,
Chun-Kit Chan,
Wei Yan
Publication year - 2017
Publication title -
journal of industrial and management optimization
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.325
H-Index - 32
eISSN - 1553-166X
pISSN - 1547-5816
DOI - 10.3934/jimo.2016046
Subject(s) - supply chain , risk neutral , channel coordination , order (exchange) , business , microeconomics , function (biology) , value (mathematics) , channel (broadcasting) , mechanism (biology) , computer science , supply chain management , economics , marketing , finance , computer network , philosophy , epistemology , evolutionary biology , machine learning , biology
This paper considers a two-supplier one-retailer coordinated supply chain system with auction and contracting mechanism incorporating participants' risk attitudes. The risk attitude is quantified using the value-at-risk (VaR) measure and the retailer faces a stochastic linear price-dependent demand function. In the supply chain, the suppliers (providing identical products) compete with each other in order to win the ordering contract of the retailer. Several auction and contracting mechanisms are developed and compared. It can be analytically shown that the retail price of the risk-averse system is higher than that of the risk-neutral system, but the order quantity is lower than that of the risk-neutral system.Department of Applied Mathematics2016-2017 > Academic research: refereed > Publication in refereed journalbcr