scholarly journals Green Supply Chain Game Model and Contract Design: Risk Neutrality vs. Risk Aversion

2021 ◽  
Author(s):  
Jianhu Cai ◽  
Huazhen Lin ◽  
Xiaoqing Hu ◽  
Minyan Ping
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Risk Tolerance ◽  
Retail Price ◽  
Green Supply Chain ◽  
Risk Averse ◽  
Equilibrium Solutions ◽  
Risk Neutral

Abstract This paper incorporates the players’ risk attitudes into a green supply chain (GSC) consisting of a supplier and a retailer. The supplier conducts production and determines the green level and wholesale price as a game leader, the retailer sells green products to consumers and determines the retail price as a follower. Equilibrium solutions are derived, and the influence of risk aversion on the GSC is examined. Our results show that, for the centralized GSC, risk aversion lowers the green level and the retail price; while for the decentralized GSC, risk aversion lowers the wholesale price and the retail price, but it may induce the supplier to increase the green level given a large risk tolerance of the supplier. Meanwhile, the risk-averse decentralized GSC may obtain more expected profit than the risk-neutral decentralized GSC. Furthermore, this paper designs a revenue-and-cost-sharing joint contract to coordinate the risk-neutral GSC, and such a contract can improve the risk-averse GSC under specific conditions.

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 Research on the Dynamics Game Model in a Green Supply Chain: Government Subsidy Strategies under the Retailer’s Selling Effort Level

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-15 ◽  
Author(s):  
Xigang Yuan ◽  
Xiaoqing Zhang ◽  
Dalin Zhang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Game ◽  
Retail Price ◽  
Green Supply Chain ◽  
Government Subsidy ◽  
Principal Agent Theory ◽  
Effort Level ◽  
The Impact ◽  
Selling Effort

Based on dynamic game theory and the principal-agent theory, this paper examined different government subsidy strategies in green supply chain management. Assuming that the retailer’s level of selling effort involved asymmetric information, this study analyzed the impact of different government subsidy strategies on the wholesale price, the product greenness level, retail price, the level of selling effort, the manufacturer’s profit, and the retailer’s profit. The results showed that (1) the government’s subsidy strategy can effectively not only improve the product greenness level but also increase the profits of an enterprise in a green supply chain, which helps the retailer to enhance their selling effort; (2) regardless of whether the retailer’s level of selling effort was high or low, as the government’s subsidy coefficient increased, the wholesale price continued to decrease, and the product greenness level and retailer’s selling effort level also increased.

scholarly journals Research on the Maritime Logistics Pricing Model of Risk-Averse Retailer-Dominated Dual-Channel Supply Chain

2018 ◽  
Vol 25 (s2) ◽  
pp. 107-116
Author(s):  
Qing Fang ◽  
Zeping Tong ◽  
Liang Ren ◽  
Ao Liu
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Risk Averse ◽  
Market Demand ◽  
Maritime Logistics ◽  
Decentralized Supply Chain ◽  
Dual Channel ◽  
On Line ◽  
Dual Channel Supply Chain

Abstract Price decision is studied in a risk-averse retailer-dominated dual-channel supply chain, which consisting of one manufacturers and one retailer with both off-line and on-line channels. Firstly, two mean-variance models in centralized and decentralized supply chain are established. Secondly, the optimal solutions under the two decision modes are compared and analyzed. The results shows that the price of dual-channel of retailer decreased with the increase of retailers’ risk- aversion coefficient and the standard deviation of the fluctuation of market demand, while the wholesale price changes is on the contrary; in addition, when the market demand is greater than a certain value, the prices of dual channel are correspondingly higher in decentralized supply chain than in centralized supply chain, and vice versa. In addition, when the retailer’s risk aversion is in a certain interval, the expected utility of the whole supply chain is greater in centralized supply chain than in decentralized decision, and vice versa. Finally, a numerical example is given to verify the above conclusions.

scholarly journals Green Supply Chain Management with Nash Bargaining Loss-Averse Reference Dependence

Mathematics ◽  
2021 ◽  
Vol 9 (24) ◽  
pp. 3154
Author(s):  
Wentao Yi ◽  
Zhongwei Feng ◽  
Chunqiao Tan ◽  
Yuzhong Yang
Keyword(s):  
Supply Chain ◽  
Loss Aversion ◽  
Reference Point ◽  
Wholesale Price ◽  
Optimal Strategies ◽  
Retail Price ◽  
Nash Bargaining ◽  
Green Supply Chain ◽  
Bargaining Solution ◽  
Efficiency Coefficient

This paper investigates a two-echelon green supply chain (GSC) with a single loss-averse manufacturer and a single loss-averse retailer. Since the Nash bargaining solution exactly characterizes endogenous power and the contribution of the GSC members, it is introduced as the loss-averse reference point for the GSC members. Based on this, a decision model of the two-echelon GSC with loss aversion is formulated. The optimal strategies of price and product green degree are derived in four scenarios: (a) the centralized decision scenario with rational GSC members, namely the CD scenario; (b) the decentralized decision scenario with rational GSC members, namely the DD scenario; (c) the decentralized decision scenario with the GSC members loss-averse, where the manufacturer’s share is below its own loss-averse reference point, namely the DD(∆m ≥ πm) scenario; (d) the decentralized decision scenario with the GSC members loss-averse, where the retailer’s share is below its own loss-averse reference point, namely the DD(∆r ≥ πr) scenario. Then, a comparative analysis of the optimal strategies and profits in these four scenarios is conducted, and the impacts of loss aversion and green efficiency coefficient of products (GECP) on the GSC are also performed. The results show that (i) GECP has a critical influence on the retail price and the wholesale price; (ii) the GSC with loss aversion provide green products with the lowest green degree; (iii) the retail price, the wholesale price and product green degree are decreasing monotonically with the loss aversion level of the GSC member without incurring loss; (iv) furthermore, the effect of the loss aversion level of the GSC member with incurring loss on the optimal strategies is related to GECP and the gap between the GSC members’ loss aversion levels.

scholarly journals Decentralized Supply Chains under Random Price-Dependent Demand: Noncooperative Equilibria vs. Coordination with Cost-Sharing Contracts

2020 ◽  
Vol 2020 ◽  
pp. 1-15
Author(s):  
Yanpeng Sun ◽  
Cheng Ma ◽  
Qi Sun
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Retail Price ◽  
Lost Sales ◽  
Supply Chain System ◽  
Decentralized Supply Chain ◽  
Equilibrium Response ◽  
Buy Back ◽  
Dependent Demand

It is common for a supplier to sell products to multiple retailers. In this paper, we investigate the equilibrium behavior of a decentralized supply chain with multiple retailers facing a random price-dependent demand in the additive form. Here, we consider two kinds of demand functions: the distribution of the demand depends only on the retailer’s own retail price (noncompeting retailers) and not only on his own retail price but also on that of the other retailers (competing retailers). We present appropriate wholesale price, buy-back, and lost-sales cost-sharing contracts to coordinate the total supply chain, so that when all the retailers adopt their equilibrium response, the supply chain system coordination is also achieved. Furthermore, the coalition formation among retailers is also analyzed. We find that with buy-back and lost-sales cost-sharing contracts and linear price-dependent demand function, retailers always prefer being in the grand coalition to forming any other coalition.

scholarly journals Pricing and Coordination Strategy in a Green Supply Chain with a Risk-Averse Retailer

2019 ◽  
Vol 2019 ◽  
pp. 1-12
Author(s):  
Liyan Wang ◽  
Minghai Ye ◽  
Shanshan Ma ◽  
Yipeng Sha
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Numerical Analysis ◽  
Random Variable ◽  
Retail Price ◽  
Green Supply Chain ◽  
Green Product ◽  
Risk Averse ◽  
Coordination Strategy ◽  
Optimal Decisions

This paper addresses the pricing and coordination strategy in a green supply chain in which a manufacturer produces a green product and sells it to a risk-averse retailer. The product’s demand is a random variable influenced by the green level and the retail price. The problem is modeled in three different structures, a centralized and two decentralized models, in which the upstream manufacturer and the downstream retailer act as the channel leader, respectively. This paper presents the optimal decisions for all supply chain members, analyzes the effects of green degree and risk-averse coefficient on the supply chain members’ decision-making and their profits, and performs the numerical analysis. The results show that the green degree and the whole supply chain’s expected profits are highest in the centralized scenario, followed by the retailer-led scenario, and lowest under the manufacturer-led scenario; the green degree and the manufacturer’s expected profit increase with the risk-averse coefficient, no matter who dominates the channel; however, the risk-averse coefficient’s effects on the retailer’s expected utility and the retail price depends on who dominates the channel and on the greening investment parameter.

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.

scholarly journals Optimal Decision of Deferred Payment Supply Chain considering Bilateral Risk-Aversion Degree

2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Liu Liang ◽  
Li Futou
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Risk Averse ◽  
Order Quantity ◽  
Initial Capital ◽  
Optimal Order Quantity ◽  
Degree Of Risk

This paper aims to fill up the gap that the previous research has never explored, the deferred payment supply chain with a risk-averse supplier. To this end, the conditional value-at-risk (CVaR) was adopted as a criterion to measure the influence of retailer’s deferred payment on supply chain performance. According to this criterion, the retailer’s optimal order quantity and the supplier’s optimal wholesale price per unit product were investigated under decentralized decision-making. Then, the existence of a unique optimal strategy was discussed for risk-averse supplier and retailer, and the values of risk-averse, initial capital, and wholesale price were calculated in detail. Finally, the theoretical results were testified through a numerical example. It is concluded that retailer’s optimal order quantity is negatively correlated with the wholesale price, initial capital, and degree of risk aversion, so that the retailer can benefit through proper risk aversion; the supplier’s expected profit decreases with the increase in the degree of risk aversion, yet the optimal wholesale price is determined by the degree of risk aversion of supplier and retailer. The research findings shed valuable new light on how to manage a supply chain involving risk-averse supplier and retailer.

scholarly journals Green Supply Chain Decisions Considering Consumers’ Low-Carbon Awareness under Different Government Subsidies

2020 ◽  
Vol 12 (6) ◽  
pp. 2281 ◽  
Author(s):  
Chang Su ◽  
Xiaojing Liu ◽  
Wenyi Du
Keyword(s):  
Supply Chain ◽  
Carbon Emission ◽  
Wholesale Price ◽  
Retail Price ◽  
Green Supply Chain ◽  
Power Structures ◽  
Green Products ◽  
Government Subsidies ◽  
Emission Level ◽  
The Government

This study examined how to arrange the generation and pricing of supply chain members in the case of consumer green preference with different government subsidies. The green supply chain comprises a manufacturer and a retailer; the government subsidizes manufacturers who produce green products and consumers who buy green products. The study built a green supply chain pricing decision model with different forms of subsidy under various power structures. By backward induction and sensitivity analysis, this study analyzed optimal strategies of green supply chain under various modes, and we discuss how the government subsidy coefficient affects the optimal decision of a green supply chain. The results show that, firstly, whether the government subsidizes the manufacturers or the consumers, the wholesale price offered by the manufacturer is directly proportional to the subsidy coefficient under the two power structures. Secondly, when the government subsidizes the manufacturer, the carbon-emission level and the retail price are inversely proportional to the subsidy coefficient under the manufacturer leader; the carbon-emission level and the retail price are all directly proportional to the subsidy coefficient under the retailer leader. Finally, when the government subsidizes the consumers, the carbon-emission level and the retail price are directly proportional to the subsidy coefficient under the two power structures.

scholarly journals Green Supply Chain Management with Cooperative Promotion

2021 ◽  
Vol 13 (6) ◽  
pp. 3204
Author(s):  
Ke Yan ◽  
Guowei Hua ◽  
Edwin Tai Chiu Cheng
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Wholesale Price ◽  
Retail Price ◽  
Channel Structure ◽  
Green Supply Chain Management ◽  
Green Supply Chain ◽  
Chain Management ◽  
On Demand ◽  
Green Investment

Green supply chain management has received increasing attention as consumers have become more environmentally conscious. Manufacturers are making green investments to meet consumers’ demands, while retailers in different markets often engage in cooperative promotion to attract more consumers. This study develops game theoretic models for investigating cooperative promotion for two cross-market firms with different channel structures, i.e., decentralized and centralized. The manufacturer determines the wholesale price for the retailers and the green investment of a product, and the retailers determine the promotional effort and retail price. This study finds that whether the firms join in cooperative promotion mainly depends on the wholesale price, as well as the impacts of the price, green investment, and cooperative promotional activities on the demand. When the wholesale price is relatively low, the retail price of the decentralized green supply chain must be lower than that of the centralized green supply chain. On the contrary, the difference in the retail price between the two green supply chains varies with the impacts of green investment and cooperative promotional activities on demand. In addition, due to the influence of channel structure, the contribution to cooperative promotion of the centralized supply chain is more than that of the decentralized supply chain with the most given conditions. Moreover, as the impact of cooperative promotional activities on demand increases, the centralized green supply chain does not necessarily result in higher profits than the decentralized green supply chain.

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