Decentralized Supply Chain Decisions on Lead Time Quote and Pricing with a Risk-averse Supplier

Chen, Weichun, Li, Bo, Song, Dongping and Li, Qinghua (2017) Decentralized Supply Chain Decisions on Lead Time Quote and Pricing with a Risk-averse Supplier. MANAGERIAL AND DECISION ECONOMICS, 38 (4). pp. 565-580.

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Abstract

<jats:p>We consider a decentralized supply chain containing a risk‐averse supplier and a risk‐neutral retailer with lead time‐sensitive and price‐sensitive demands. A Stackelberg game is employed to model the lead time quote and pricing decision process between the two members under the conditional value‐at‐risk criterion. A unique equilibrium is obtained. Using the corresponding centralized mode as a benchmark, we find that a less risk‐averse supplier is better to cooperate and share risk with the retailer to improve the entire supply chain's efficiency. With a uniformly distributed realized lead time, the impact of the supplier's risk aversion on the decisions can be characterized by a few threshold values of the late delivery penalty cost. In particular, when the unit delay penalty cost exceeds a certain level, a more risk‐averse supplier will counter‐intuitively quote a shorter lead time by risking a higher delay penalty cost. Copyright © 2016 John Wiley &amp; Sons, Ltd.</jats:p>

Item Type:	Article
Depositing User:	Symplectic Admin
Date Deposited:	17 Jun 2016 15:25
Last Modified:	31 Oct 2023 01:39
DOI:	10.1002/mde.2804
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3001672