scholarly journals Optimal Decisions for Adoption of Item-Level RFID in a Retail Supply Chain with Inventory Shrinkage under CVaR Criterion

2016 ◽  
Vol 2016 ◽  
pp. 1-17
Author(s):  
Chunming Xu ◽  
Daozhi Zhao
Keyword(s):  
Supply Chain ◽  
Recovery Rate ◽  
Value At Risk ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Conditional Value At Risk ◽  
Decentralized System ◽  
Revenue Sharing Contract ◽  
Item Level ◽  
Inventory Shrinkage

This paper investigates the effect of item-level RFID on inventory shrinkage in the retail supply chain, which consists of a risk-neutral manufacturer and a risk-averse retailer. Under conditional value-at-risk (CVaR) criterion, two different supply chain settings are discussed as follows. In the centralized setting, we develop the models in both RFID case and no RFID case, respectively. Comparisons between the two cases are made. In particular, a sufficient condition is given to judge whether to adopt item-level RFID. In the decentralized setting, we focus on discussing two different contract types including wholesale price contact and revenue sharing contract. Finally, number examples and sensitivity analysis are given to illustrate the proposed models. The results show that, for the centralized system, the sales-available rate, the recovery rate, and the tag cost are mainly the driving factors in evaluating the benefit of an item-level RFID. In particular, when the sales-available rate and the tag cost are quite small and the recovery rate is higher, the supply chain partners’ profits obtained by investment for RFID are improved significantly. For the decentralized system, under revenue sharing contract, Pareto improving outcome and coaffording risk can be achieved if the retailer sets an appropriate parameter for the manufacturer.

scholarly journals Coordination for pull and push contracts in decentralized system with uncertain supply

2020 ◽  
Author(s):  
Wensi Zhang ◽  
Hongrui Chu
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Order Quantity ◽  
Management Decisions ◽  
Decentralized System ◽  
Decentralized Supply Chain ◽  
Revenue Sharing Contract ◽  
Buyback Contract ◽  
Uncertain Supply

This paper investigates how a random supply can influence management decisions under pull and push contracts in a decentralized supply chain with one supplier and one retailer. We suppose that the supplier faces yield uncertainty, and we adopt game models to analyse the supply chain members’ decisions (i.e., wholesale price and order quantity) under the two commonly used contracts. Specifically, we analyse the revenue sharing mechanism and buyback mechanism with pull and push contracts, respectively, and find that the buyback contract can efficiently coordinate the supply chain with push contract, while the revenue sharing contract cannot improve the performance with a pull contract. Then we design a modified revenue sharing contract that introduces a subsidy for excess inventory and shows that for the pull case, the proposed mechanism can coordinate the supply chain effectively. Finally, the analysis results are displayed intuitively by numerical cases.

Revenue Sharing Contract of Green Supply Chain under Manufacturer Risk-Aversion

2014 ◽  
Vol 697 ◽  
pp. 482-487
Author(s):  
Shi Ying Jiang ◽  
Chun Yan Ma
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Risk Aversion ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Game Model ◽  
Product Price ◽  
Revenue Sharing Contract

Background on two stages green supply chain consisting of a manufacturer and a retailer, considering the degree of risk aversion and product greenness, consumer preferences and other factors, the centralized decision-making game model and manufacturer-leading Stackelberg game model are established.Then two game models are compared. The interaction of product greenness, wholesale price, product price,and risk aversion utility for manufacturers and retailers are also disscussed. Finally, the revenue sharing contract is applied to coordinate the green supply chain . The results show that:(1) In the centralized decision-making model, there is a critical value of the product green degree; (2)In manufacturer-leading Stackelberg game model, the higher the green degree of the product, the higher the manufacturer's wholesale price,and the wholesale price increases as risk aversion degree of manufacturers improves;(3)The revenue sharing contract can coordinate this type of green supply chain under manufacturers risk-averse.

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

Mathematics ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 586
Author(s):  
Wei Liu ◽  
Shiji Song ◽  
Ying Qiao ◽  
Han Zhao
Keyword(s):  
Supply Chain ◽  
Loss Aversion ◽  
Value At Risk ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Confidence Levels ◽  
Quantity Flexibility ◽  
Quantity Flexibility Contract

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.

A two-period pricing model with hunger marketing strategy

2018 ◽  
Vol 13 (1) ◽  
pp. 81-100 ◽  
Author(s):  
Lili Yu ◽  
Juzhi Zhang
Keyword(s):  
Supply Chain ◽  
Marketing Strategy ◽  
Revenue Sharing ◽  
Retail Price ◽  
Discount Factor ◽  
Pricing Model ◽  
Equilibrium Solutions ◽  
Content Type ◽  
Decentralized System ◽  
Revenue Sharing Contract

Purpose This paper aims to investigate the effect of hunger marketing strategy on supply chain pricing and coordinate the supply chain through a two-period pricing model. Design/methodology/approach According to a two-period pricing model with hunger marketing strategy, the authors investigate two different scenarios: the centralized system and the decentralized system. The optimal or equilibrium solutions are calculated and compared in two different scenarios. Findings First, the hunger marketing strategy can improve the total profit of the supply chain by increasing the retail price and the total sales volume. Second, the hunger marketing strategy aggravates the double marginalization effect. Third, the authors introduce the revenue-sharing contract and characterize the conditions under which the revenue-sharing contract can coordinate the supply chain and be accepted by both the members. Research limitations/implications First, the authors suppose the same retail price in two periods for mathematic simplicity; second, they do not consider the discount factor for the revenue during the two periods. Practical implications This paper provides a guide to policymakers in terms of product pricing and supply rate. Originality/value First, the authors suppose the same retail price in two periods for mathematic simplicity; second, they do not consider the discount factor for the revenue during the two periods.

scholarly journals Supply chain contracting coordination for fresh products with fresh-keeping effort

2017 ◽  
Vol 117 (3) ◽  
pp. 538-559 ◽  
Author(s):  
Qi Zheng ◽  
Petros Ieromonachou ◽  
Tijun Fan ◽  
Li Zhou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Optimal Decision ◽  
Decision Variable ◽  
Coordination Problem ◽  
Content Type ◽  
Revenue Sharing Contract ◽  
Decentralized Decision Making

Purpose Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the contract between retailer and supplier. The optimized prices for the retailer and the supplier, taking the fresh-keeping effort into consideration, are derived. Design/methodology/approach To address this issue, the authors consider a two-echelon supply chain consisting of a retailer and a supplier (i.e. wholesaler) for two scenarios: centralized and decentralized decision making. The authors start from investigating the optimal decision in the centralized supply chain and then comparing the results with those of the decentralized decision. Meanwhile, a fresh-keeping cost-sharing contract and a fresh-keeping cost- and revenue-sharing contract are designed. Numerical examples are provided, and managerial insights are discussed at the end. Findings The results show that the centralized decision is more profitable than the decentralized decision; a fresh product supply chain (FPSC) can only be coordinated through a fresh-keeping cost- and revenue-sharing contract; the optimal retail price, wholesale price and fresh-keeping effort can all be achieved; and the profit of a FPSC is positively related to consumers’ sensitivity to freshness and negatively correlated with their sensitivity to price. Research limitations/implications This research is based on the assumption that demand is relatively stable. It has not addressed when demand is stochastic. Practical implications The findings would be useful for managers in fresh food sector in terms of how to deal with suppliers in order to maximize total profit while also provide freshest food to the customers. Originality/value Few studies have considered fresh-keeping effort as a decision variable in the modelling of supply chain. In this paper, a mathematical model for the fresh-keeping effort and for price decisions in a supply chain is developed. In particular, fresh-keeping cost-sharing contract and revenue-sharing contract are examined simultaneously in the study of the supply chain coordination problem.

Coordinating Vulnerable Supply Chains with Option Contracts

2021 ◽  
pp. 2050053
Author(s):  
Zhongyi Liu ◽  
Shengya Hua ◽  
Guanying Wang
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Value At Risk ◽  
Numerical Study ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Option Contract ◽  
Risk Neutral ◽  
Disruption Risk

We investigate vulnerable supply chain coordination with an option contract in the presence of supply chain disruption risk caused by external and internal disturbances. The supply chain consists of a single risk-neutral supplier and a risk-averse retailer. We characterize the retailer’s order quantity decision under the Conditional Value-at-Risk (CVaR) criterion and the supplier’s production decision. The results show that facing disruption risk and risk-aversion, both the retailer and the supplier would be more prudent to order and produce less than the risk-neutral scenario, inducing damage to the supply chain performance. The number of options purchased is decreasing in disruption risk and the risk-aversion of the retailer. The supplier will increase production as the disruption risk decreases or the shortage penalty increases. When the supplier does not know the risk-aversion of the retailer, the former will produce more and bear a higher overstock risk. We also investigate conditions that facilitate vulnerable supply chain coordination and find that the existence of risk-aversion and disruption risk restrict the option price and exercise price to lower price levels. Finally, we compare the option contract with wholesale price contract from the supplier’s and retailer’s perspectives through a numerical study.

SUPPLY CHAIN COORDINATION WITH CVaR CRITERION

2009 ◽  
Vol 26 (01) ◽  
pp. 135-160 ◽  
Author(s):  
LEI YANG ◽  
MINGHUI XU ◽  
GANG YU ◽  
HANQIN ZHANG
Keyword(s):  
Supply Chain ◽  
Value At Risk ◽  
Supply Chain Coordination ◽  
Revenue Sharing ◽  
Retail Price ◽  
Conditional Value At Risk ◽  
Risk Averse ◽  
Mild Conditions ◽  
Quantity Flexibility ◽  
Buy Back

We study the coordination of supply chains with a risk-neutral supplier and a risk-averse retailer. Different from the downside risk setting, in a conditional value-at-risk (CVaR) framework, we show that the supply chain can be coordinated with the revenue-sharing, buy-back, two-part tariff and quantity flexibility contracts. Furthermore the revenue-sharing contracts are still equivalent to the buy-back contracts when the retail price is fixed. At the same time, it is shown that the risk-averse retailer of the coordinated supply chain can increase its profit by raising its risk-averse degree under mild conditions.

Wholesale Price for Supply Chain Coordination via Conditional Value-at-Risk Minimization

2010 ◽  
Vol 20-23 ◽  
pp. 88-93 ◽  
Author(s):  
Chuan Xu Wang
Keyword(s):  
At Risk ◽  
Supply Chain ◽  
Value At Risk ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Individual Member ◽  
Risk Minimization ◽  
Proposed Model

The theory of the conditional value-at-risk (CVaR) in financial risk management is considered in this paper to develop a model of supply chain coordination with a wholesale pricing policy. The proposed model solves the drawbacks of objective function in current supply chain coordination model. A numerical example is given to demonstrate the effectiveness of the proposed model. The following helpful conclusions are drawn from the paper: with the increase of the degree of risk averting for supply chain individual member, the optimal order quantity of supply chain is decreasing, while the optimal profit is decreasing; If supplier’s risk averting degree increases, supplier has to increase wholesale price to achieve supply chain coordination; If retailer’s risk averting degree increases, supplier has to decrease wholesale price to achieve supply chain coordination.

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