Cooperative game analysis of a supply chain with one risk-neutral supplier and two risk-averse retailers

When the demand is sensitive to retail price, revenue sharing contract and two-part tariff contract have been shown to be able to coordinate supply chains with risk neutral agents. We extend the previous studies to consider a risk-averse retailer in a two-echelon fashion supply chain. Based on the classic mean-variance approach in finance, the issue of channel coordination in a fashion supply chain with risk-averse retailer and price-dependent demand is investigated. We propose both single contracts and joint contracts to achieve supply chain coordination. We find that the coordinating revenue sharing contract and two-part tariff contract in the supply chain with risk neutral agents are still useful to coordinate the supply chain taking into account the degree of risk aversion of fashion retailer, whereas a more complex sales rebate and penalty (SRP) contract fails to do so. When using combined contracts to coordinate the supply chain, we demonstrate that only revenue sharing with two-part tariff contract can coordinate the fashion supply chain. The optimal conditions for contract parameters to achieve channel coordination are determined. Numerical analysis is presented to supplement the results and more insights are gained.

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Risk-Averse Co-Decision for Lower-Carbon Product Family Configuration and Resilient Supplier Selection

Sustainability ◽

10.3390/su14010384 ◽

2021 ◽

Vol 14 (1) ◽

pp. 384

Author(s):

Dengzhuo Liu ◽

Zhongkai Li ◽

Chao He ◽

Shuai Wang

Keyword(s):

Supply Chain ◽

Supplier Selection ◽

Programming Model ◽

Ghg Emissions ◽

Product Family ◽

Mixed Integer ◽

Risk Averse ◽

Worst Case ◽

Risk Neutral ◽

Disruption Risks

Due to global pandemics, political unrest and natural disasters, the stability of the supply chain is facing the challenge of more uncertain events. Although many scholars have conducted research on improving the resilience of the supply chain, the research on integrating product family configuration and supplier selection (PCSS) under disruption risks is limited. In this paper, the centralized supply chain network, which contains only one major manufacturer and several suppliers, is considered, and one resilience strategy (i.e., the fortified supplier) is used to enhance the resilience level of the selected supply base. Then, an improved stochastic bi-objective mixed integer programming model is proposed to support co-decision for PCSS under disruption risks. Furthermore, considering the above risk-neutral model as a benchmark, a risk-averse mixed integer program with Conditional Value-at-Risk (CVaR) is formulated to achieve maximum potential worst-case profit and minimum expected total greenhouse gases (GHG) emissions. Then, NSGA-II is applied to solve the proposed stochastic bi-objective mixed integer programming model. Taking the electronic dictionary as a case study, the risk-neutral solutions and risk-averse solutions that optimize, respectively, average and worst-case objectives of co-decision are also compared under two different ranges of disruption probability. The sensitivity analysis on the confidence level indicates that fortifying suppliers and controlling market share in co-decision for PCSS can effectively reduce the risk of low-profit/high-cost while minimizing the expected GHG emissions. Meanwhile, the effects of low-probability risk are more likely to be ignored in the risk-neutral solution, and it is necessary to adopt a risk-averse solution to reduce potential worst-case losses.

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Why and How Does a Supplier Choose Factoring Finance?

Mathematical Problems in Engineering ◽

10.1155/2020/9258646 ◽

2020 ◽

Vol 2020 ◽

pp. 1-14

Author(s):

Chunying Tian ◽

Dongyan Chen ◽

Zhaobo Chen ◽

Ding Zhang

Keyword(s):

Supply Chain ◽

Credit Risk ◽

Trade Credit ◽

Risk Attitude ◽

Decision Models ◽

Risk Averse ◽

Financial Benefit ◽

Risk Neutral

Suppliers offering trade credit to the downstream retailers have to face many problems, such as receivables management, capital occupancy, and buyer’s credit risk. Many of them choose factoring finance to solve those problems simultaneously. This paper develops several supply chain decision models to show the benefits a supplier can obtain from the main functions of factoring and how he should choose between recourse factoring and nonrecourse factoring. In particular, we identify the conditions on which factoring may bring benefits (including financial benefit, guarantee benefit, and receivables management benefit) to the supplier. The supplier’s choice between recourse and nonrecourse factoring relies on his risk attitude. Given that the supplier is risk-neutral and the factoring fees are acceptable, recourse factoring is preferred when the factoring finance ratio is relatively high; otherwise, nonrecourse factoring is preferred. However, if the supplier is risk-averse, his preference for the two factoring schemes under different finance ratios may change when the risk constraints become stricter. If the target profit is lower than a certain level, the supplier’s financial choice will switch from recourse factoring to nonrecourse factoring in the case finance ratio is relatively low; otherwise, his financial choice switches from nonrecourse factoring to recourse factoring in the case finance ratio is relatively high.

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Supply chain enterprises cooperative game analysis

2009 ISECS International Colloquium on Computing, Communication, Control, and Management ◽

10.1109/cccm.2009.5267766 ◽

2009 ◽

Cited By ~ 1

Author(s):

Bo Yan ◽

Lei Wang

Keyword(s):

Supply Chain ◽

Cooperative Game ◽

Game Analysis

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Pemodelan Rantai Suplai Berbasis Economic Production Quantity dengan Menerapkan Kredit Perdagangan Dua Eselon

JOURNAL OF INDUSTRIAL AND MANUFACTURE ENGINEERING ◽

10.31289/jime.v3i1.2497 ◽

2019 ◽

Vol 3 (1) ◽

pp. 14

Author(s):

Jaka Permana

Keyword(s):

Supply Chain ◽

Trade Credit ◽

Risk Averse ◽

Neutral Solution ◽

Economic Production Quantity ◽

Economic Production ◽

Risk Neutral ◽

Replenishment Policy ◽

Production Quantity ◽

Better Than

Implementation of the supply chain is felt more important and very useful in today’s era of industrialization. But in the process of supply chain encountered various risks that may affect the flow of the supply chain so it can not run smoothly, such as interference or imperfectness in transportations. This research was made to propose a mathematical model for a supply chain under the effect of unexpected disruptions in transport. Supplier/manufacturer offers the retailer a trade credit period t1 , then the retailer offers the customer a credit with a period of t2 and finally the retailer receives the revenue from t2 ke T + t2 , where T is the cycle time at the retailer. Under this situation, the three cases such as T ≤ t1 ≤ T + t2 , T ≤ T + t1 ≤ t2, and t1 ≤ t2 are discussed. An EPQ (Economic Production Quantity) based model is established and retailer’s optimal replenishment policy is obtained through mathematical theorems. From the results of testing on several cases, the best solution for the two procedures has been obtained, namely between risk neutral and risk averse solutions based on the level or number of items damaged/defective. If the number of items damaged is 2 units, then solution risk neutral is far better than the risk averse solution, whereas if the number of items is damaged 3 units, then the risk averse solution is far better than the risk neutral solution.

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

10.21203/rs.3.rs-989303/v1 ◽

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.

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Empirical test of employee incentive in supply chain network based on asymmetric information game analysis and fuzzy model

Journal of Intelligent & Fuzzy Systems ◽

10.3233/jifs-189064 ◽

2020 ◽

Vol 39 (4) ◽

pp. 5895-5904

Author(s):

Siying Li

Keyword(s):

Supply Chain ◽

Asymmetric Information ◽

Index System ◽

Employee Satisfaction ◽

Fuzzy Model ◽

Evaluation Index System ◽

Evaluation Index ◽

Risk Averse ◽

Supply Chain Network ◽

Game Analysis

The construction of the evaluation index system of employee satisfaction level is the basis for an enterprise to measure the level of employee satisfaction. In this paper, the author analyzes the employee incentive in supply chain network based on asymmetric information game analysis and fuzzy model. Through the correction of network weight and threshold value, the error function decreases along the gradient direction. The construction and training of the network can be realized by MATLAB. The newff function in the software is used to construct the network, and the train function is used to train. This evaluation index system is a multi-level target evaluation system based on asymmetric information game, and its basic principle is to simplify complex problems. Long term effort is bigger when the salesperson’s risk averse parameter is more than a certain value or risk averse parameter is less but discount factor is more than a threshold; short term effort is bigger when risk averse parameter and discount factor is both less. For both information scenarios, the compensation contracts are designed and comparison analyses are conducted.

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Wholesale-retail pricing strategies under market risk and uncertain demand in supply chain using evolutionary game theory

Kybernetes ◽

10.1108/k-02-2017-0053 ◽

2018 ◽

Vol 47 (6) ◽

pp. 1178-1201 ◽

Cited By ~ 5

Author(s):

Ashkan Hafezalkotob ◽

Reza Mahmoudi ◽

Elham Hajisami ◽

Hui Ming Wee

Keyword(s):

Game Theory ◽

Supply Chain ◽

Evolutionary Game Theory ◽

Evolutionary Game ◽

Retail Price ◽

Risk Averse ◽

Content Type ◽

Risk Neutral ◽

Wholesale Pricing

Purpose Nowadays, uncertainty in market demand poses considerable risk to the retailers that supply the market. On the other hand, the risk-averse behaviors of retailers toward risk may have evolved over time. Considering a supply chain including a manufacturer and a population of retailers, the authors intend to investigate how the population of retailers tends to evolve toward risk-averse behavior. Moreover, this study aims to evaluate the effects of wholesale-retail price of manufacturer on evolutionary stable strategy (ESS) of the retailers. Design/methodology/approach Due to market uncertainty, a supply chain with a population of risk-averse and risk-neutral retailers was investigated. The wholesale pricing strategy is determined by a manufacturer acting as a leader, while retailers who make order quantity decisions act as followers. An integrated Cournot duopoly equilibrium and evolutionary game theory (EGT) approach has been used to model this situation. Findings A numerical real-world case study using Iran Khodro Company is analyzed by applying the proposed EGT approach. The study provides managerial insights to the manufacturer as well as retailers in developing their strategies. Results showed that risk behavior of retailers significantly affects optimal wholesale/retail price, profits and ESS. In the long term, the retailers tend to have a risk-neutral behavior to gain more profit. In the short term, if a retailer choses risk-averse strategy, in the long term, it will change its strategy to obtain more profit and remain in the competitive market. Originality/value The contributions in this research are fourfold. First, ESS concept to investigate the risk-averse or risk-neutral attitudes of the retailers was used. Second, the uncertain risk behavior of the competing retailers was considered. Third, the effect of varying wholesale pricing was investigated. Fourth, the equilibrium wholesale and retail prices have been obtained by considering uncertainty demand and risk.

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