Article ID: | iaor200962779 |
Country: | Singapore |
Volume: | 26 |
Issue: | 1 |
Start Page Number: | 135 |
End Page Number: | 160 |
Publication Date: | Feb 2009 |
Journal: | Asia-Pacific Journal of Operational Research |
Authors: | Yu Gang, Zhang Hanqin, Yang Lei, Yu Minghui |
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.