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In this paper, we develop three supply chain game models, i.e., the basic model, the single trade credit model, and the trade credit and revenue sharing collaboration model. Conditional value-at-risk (CVaR) criterion is used as the measure of risk assessment in these models. We analyze the optimal decisions in the centralized and decentralized situations, respectively, and verify that single trade credit cannot coordinate the supply chain. However, the collaboration contract can coordinate the supply chain. Furthermore, this paper explores the influence of risk-aversion factor, trade credit period, revenue sharing coefficient, and other parameters on the optimal decisions and studies the feasible range of Pareto improvement in the collaborative model. In numerical experiments, the results show that the decisions and profits of both the manufacturer and the retailer reply on the degree of the risk aversion, the trade credit period, and the revenue sharing coefficient. The collaborative contract effectively improves supply chain performance and achieves a ‘win-win’ situation for the supply chain members. In addition, we also consider two extensions for our research. One extension shows that the collaborative contract of trade credit and buyback can also coordinate the supply chain in a certain range. The other extension considers the optimal decision of a risk-averse manufacturer with CVaR.

This paper develops option contracts in a supplier-retailer agricultural supply chain where the market demand depends on sales effort. First, we examine a benchmark case of integrated supply chain with the loss rate. Second, we introduce three coordinating option contracts led by the supplier to reduce the retailer's risk, where the call option contract can reduce the shortage risk, the put option contract can reduce the inventory risk and the bidirectional option contract can reduce the bilateral risk. We find that both the optimal initial order quantity and the optimal option quantity increase with the sales effort and the option price will balance the influence of the loss rate on supply chain coordination. Furthermore, the bidirectional option price is the highest while its option quantity is the least, and the put option initial order quantity is the highest. Third, we also consider an option contract led by the retailer to reduce the supplier's wholesale risk. Among the above four option contracts, we find that the option quantity led by the retailer is the highest. Finally, the numerical examples present the impact of the parameters on the optimal decisions, and provide practical managerial insights to reduce the different risk in the agricultural supply chain.

We study pricing and replenishment policies for a supply chain with multiple competing retailers.Both retail-competition and retail-cooperation models for a supply chain are considered.Retail cooperation is not stable and replenishment decision is largely affected by game scenario.A Groves wholesale price contract is designed to coordinate the supply chain.Coordination mechanism includes discount, competitive impact, and revenue regulator components. This paper develops game models for a two-echelon supply chain with one supplier and multiple competing retailers. We study the pricing decision and the replenishment policy for each member under both the decentralized channel and the centralized channel, and examine the impacts of retail behaviors on them. Compared with the centralized operation, the decentralized operation with linear wholesale price obviously inflates the holding cost for each retailer, which results in the inefficiency for the whole channel. For the decentralized system, both retail-competition and retail-cooperation models are considered. The comparative analysis illustrates how the retail pricing and replenishment decisions are affected by the retail behaviors. We find that the retail cooperation is not stable since each self-interested retailer has an incentive to lower his retail price unilaterally. Finally, in order to improve the performance of the channel and each member, a Groves wholesale price contract is designed to achieve the perfect coordination between the supplier and the retailers. Meanwhile, this coordination model can also be used in the case of a supply chain with independent retailers.

In this paper, we develop a two-period inventory model of perishable products with considering the random demand disruption. Faced with the random demand disruption, the firm has two order opportunities: the initial order at the beginning of selling season (i.e., Period 1) is intended to learn the real information of the disrupted demand. When the information of disruption is realized, the firm places the second order, and also decides how many unsold units should be carried into the rest of selling season (i.e., Period 2). The firm may offer two products of different perceived quality in Period 2, and therefore it must trade-off between the quantity of carry-over units and the quantity of young units when the carry-over units cannibalize the sales of young units. Meanwhile, there is both price competition and substitutability between young and old units. We find that the quantity of young units ordered in Period 2 decreases with the quality of units ordered in Period 1, while the pricing of young units is independent of the quality level of old units. However, both the surplus inventory level and the pricing of old units monotonically increase with their quality. We also investigate the influence of two demand disruption scenarios on the optimal order quantity and the optimal pricing when considering different quality situations. We find that in the continuous random disruption scenario, the information value of disruption to the firm is only related to the disruption mean, while in the discrete random disruption scenario, it is related to both unit purchase cost of young units and the disruption levels.

This paper develops supply chain game models with multiple uncertainties, and studies the impact of channel power on the efficiency of supply chain. Besides the regular production run, the manufacturer may choose the outsourcing mode due to his production disruption risk and uncertainty of capacity allocation. We find that the manufacturer has no incentive to outsource when both the disruption risk is low enough and his production capacity is large enough. When the disruption risk is sufficiently high, the manufacturer will fully outsource production regardless of the production capacity. There is a zone of order-difference outsourcing where the manufacturer just outsources the part in excess of the certain threshold value. Under the retailer-Stackelberg (RS) game, the manufacturer׳s order-difference outsourcing strategy can induce the retailer to order more items. Unlike RS, the retailer in the manufacturer-Stackelberg (MS) game always orders a quantity equal to that in the classic newsvendor model. Meanwhile, we find that the channel power does not affect the player’s decision except in the zone of order-difference outsourcing. Compared with MS, the dominant retailer can better deal with the uncertainties and make better use of demand information. From the channel׳s perspective, the two players have the different attitudes towards the risks. The dominant manufacturer prefers to forcibly offload production risks to his partner, while the dominant retailer in RS actively takes the partner׳s risks.

For a one-supplier-one-retailer agricultural product supply chain, quantity and quality of the agricultural products often reduce because their own perishable and anthropogenic factors in the process from the supplier via the retailer to final consumers. This paper takes shortage and deterioration factors into account, establishes related profit functions of the supplier and the retailer, obtains the optimal ordering cycle and quantity decisions, and analyzes the impact of deterioration on decision makers under the decentralized system. To maximize the total profit of supply chain, we explore coordination mechanisms for the supply chain when considering shortage and deterioration factors, such as revenue sharing contract, quantity discount contract and buy-back contract. By comparing these different contracts, the coordination effect is analyzed in details. Finally, through series of numerical analysis, some managerial insights are provided.

We investigate the feasibility of coordination mechanism for two possible disruption(s) situations.When the inventory-cost disruption level is larger than a certain threshold, both players achieve win-win.The inventory-subsidy contract for disruption(s) situation has its rationality and limitation.Both disruption situations have their own robust scales.Some counter-intuitive managerial insights can be observed in the robust scale. This paper introduces a game model of one manufacturer and one retailer with the demand depending on the amount of inventory displayed on the retailer's shelf. We study coordination mechanisms of the supply chain with the two kinds of disruptions. To coordinate the channel as well as make a profit, the manufacturer needs to augment the wholesale price lever by another, i.e., an inventory-holding cost subsidy to the retailer. We show that the inventory-subsidy contract for disruption(s) situation has its rationality and limitation: from the perspective of feasibility analysis, we find that when the disrupted amount of inventory-holding cost is larger than a certain threshold value, both players can achieve win-win by using inventory-subsidy contract. Otherwise, it may be ineffective. For two-factor disruptions, there are some mutual restraints between the disrupted inventory-holding cost and the disrupted demand when the coordination mechanism is used. We also find that both disruption situations have their own robust scales, in which the manufacturer should not change the original production plan but at the expense of providing a more attractive subsidy scheme to the retailer. Interestingly, some counter-intuitive managerial insights can be observed in robust scales. For example, the market demand increases with the displayed inventory level in the setting of the demand-stimulating inventory. However, the higher the demand, the less displayed inventory level will be in the robust scale.

This paper considers a supply chain in which a buyer purchases finished items from a contracting supplier to satisfy a stochastic market demand, where the supplier’s production is subject to random yield. We assume that the buyer can make up the shortage by sourcing from an emergency backup supplier. We develop two Stackelberg game models, i.e. buyer-Stackelberg (BS) model and supplier-Stackelberg (SS) model, and find that the decentralised BS model results in a higher stocking factor of supplier’s input than the decentralised SS model. Compared with BS model, the buyer in SS model performs more explicit order plan, and we find that only when the actual yield of the supplier is insufficient, the buyer would use emergency backup sourcing to make up the shortage. When the manufacturing operation of the supplier is in the good state, the buyer only orders a certain amount and has some leftover. When the actual yield of the supplier is moderate, the buyer uses up every item produced from the supplier regardle...

This paper develops three (re)ordering models of a supply chain consisting of one risk-neutral manufacturer and one loss-averse retailer to study the coordination mechanism and the effects of the reordering policy on the coordination mechanism. The three (re)ordering policies are twice ordering policy with break-even quantity, twice ordering policy without break-even quantity and once ordering policy, respectively. We design a buyback-setup-cost-sharing mechanism to coordinate the supply chain for each policy, and Pareto analysis indicates that both the manufacturer and the retailer will realize a 'win-win' situation. By comparing the models, we find that twice ordering policy with break-even quantity is absolutely dominant for both the retailer and the supply chain. However, only if the break-even quantity is less than the mean quantity to failure, twice ordering policy without break-even quantity is dominant over the once ordering policy. The higher marginal revenue can induce more order quantity of the retailer under both twice ordering policy with break-even quantity and once ordering policy. However, it is interesting that it has no effect on the order plan of centralized decision-maker in twice ordering policy without break-even quantity.

This paper explores a two-echelon tourism supply chain consisting of a hotel and an online travel agency. The upside hotel rooms can be sold through the downside hotel alliance and online travel agency. The hotel alliance, selling rooms at a lower price, is a direct sale platform with a negligible entry fee. Notwithstanding, the online travel agency sells the room at a higher price with related personalized service. Customers will be refunded partially in case of their cancellation or no-show. An integrated model and two decentralized models based on Bertrand and Stackelberg games are developed, respectively. The results show that when the wholesale price is lower than a certain value, both the hotel and the online travel agency can gain more profit from the Stackelberg game than that from the Bertrand game. In the case that the hotel allows overbooking, the optimal overbooking quantity is obtained. If the overbooking proportion is too high, overbooking is profitable for the hotel only when the overbooking cost is lower than a certain value. At the end of the study, some experiments are conducted to analyze the sensitivity of the optimal prices and profits in the light of certain parameters.

This paper investigates the coordination mechanism for supply chain with one manufacturer and multiple competing suppliers in the electronic market. We first study two conventional price-only policies, including wholesale price policy and catalog policy, based on the reverse Vickrey auction, and show that both the buyer and the powerful suppliers (with production cost less than a special threshold value) prefer catalog policy to wholesale price policy, and the powerless suppliers prefer wholesale price policy to catalog policy. Simultaneously, neither policy can coordinate the channel composed of the manufacturer and the winning supplier. We also show that a quantity discount policy cannot coordinate the supply chain with competing suppliers unless a kind of restriction is imposed. The aim of the paper is to explore a coordination mechanism, i.e., the price-restricted quantity-discount policy. Pareto analysis indicates that the manufacturer and the winning supplier will realize the ‘win-win’ situation, and the channel can also be coordinated. A key managerial implication of our study is that additional restrictive condition may be necessary to eliminate system inefficiency. Some numerical examples are also given to illustrate management insights.

The paper investigates the pricing decisions of two competing supply chains under the different information structures. Each retailer has private information about the market demand and has the right to decide whether or not to share the information with the manufacturer. Three demand-information structures, i.e., information sharing in both supply chains, information sharing in only one supply chain and information sharing in neither supply chain, are considered. We investigate the value of information by comparing the information structures, and find that the information value not only works in the channel directly, but also does in the competing channel indirectly. Information sharing in a supply chain always benefits its manufacturer, but hurts its retailer; while it benefits both the manufacturer and the retailer of competing supply chain, regardless of whether this competing supply chain has information sharing. From the perspective of channel, when the competition is more intense, information sharing in a supply chain makes this supply chain better off, and when the competition is less intense, the information sharing in a supply chain makes this supply chain worse off. However, it always makes the competing supply chain better off regardless of whether the competing supply chain has information sharing.

In this paper, we consider coordination model of a one-manufacturer and multi-retailer supply chain with a dominant retailer's sales promotion opportunity and possible demand disruption. An appropriate contractual scheme can be used to fully coordinate the supply chain even if the demand disruption occurs. In our study, we also analyze how the demand disruption affects the coordination mechanism. When the demand is disrupted, the manufacturer only needs to adjust the maximum variable wholesale price and the subsidy rate under the linear quantity discount scheme. For each case of the demand disruption, we find that the higher the market share of the dominant retailer, the lower its average wholesale price will be. Meanwhile, the higher service cost leads to the higher subsidy rate provided by the manufacturer. The optimal wholesale/retail price, order quantity and subsidy rate can be greatly influenced by the demand disruption. If the disrupted amount of demand is sufficiently small, however, the manufacturer needs to take some special measures to prevent the retailers from deviating the order quantity of the original plan. To demonstrate these findings, we illustrate our propositions by numerical examples.

This paper develops two coordination models of a supply chain consisting of one manufacturer, one dominant retailer and multiple fringe retailers to investigate how to coordinate the supply chain after demand disruption. We consider two coordination schedules, linear quantity discount schedule and Groves wholesale price schedule. We find that, under the linear quantity discount schedule, the manufacturer only needs to adjust the maximum variable wholesale price after demand disruption. For each case of the disrupted amount of demand, the higher the market share of the dominant retailer, the lower its average wholesale price and the subsidy will be under the linear quantity discount schedule, while the higher its fraction of the supply chain's profit will be under Groves wholesale price schedule. When the increased amount of demand is very large and production cost is sufficiently low, linear quantity discount schedule is better for the manufacturer. However, when the production cost is sufficiently large, Groves wholesale price schedule is always better. We also find that the disrupted amount of demand largely affects the allocation of the supply chain's profit.

This paper develops the game models of two symmetric supply chains, each consisting of one manufacturer and one retailer, while both retailers compete in the market with a linear function. The disclosure mechanism is designed when the information of the disrupted demand is asymmetric between supply side and retail side. We first study the model with the full information as a benchmark to explore the effect of asymmetric information on the system. In the case, each manufacturer maximizes her profit while the downstream retailer only obtains the reservation profit. For the case of asymmetric information, each manufacturer can obtain the real information of the disrupted demand by using a menu of contract bundles. For each information structure, there are always robust regions for each manufacturer’s original trading quantity scheme. That is, when the disrupted amount of the demand is sufficiently small, the trading quantity will be unchanged. However, some special measures, e.g., the higher unit wholesale price, should be taken to prevent the retailer from deviating the trading quantity scheme. The high-disruption retailer gets the higher profit due to the information rent. Compared with a single supply chain, Cournot competition results in the less retail price and the lower performance for the whole system.

We develop a two-period game model of a one-manufacturer and one-retailer supply chain to investigate the optimal decisions of the players, where stock-out and holding costs are incorporated into the model. The demand at each period is stochastic and price sharply drops in mid-life. We assume the retailer has a single order opportunity, and decides how much inventory to keep in the middle of selling season. We show that both the price-protection mid-life and end-of-life returns (PME) scheme and the only mid-life and end-of-life returns (ME) scheme may achieve channel coordination and access a ‘win–win’ situation under some conditions. The larger the lowest expected profit of the retailer, the lower the possibility of ‘win–win’ situation will be. Combined with the analysis of feasible regions for coordination policies, we find that PME scheme is not always better than ME scheme from the perspective of implementable mechanism. Finally, we find that adopting the dispose-down-to (DDT) policy can bring a larger improvement of the expected channel profit in the centralized setting, and it is interesting that by using DDT policy, double marginalization occurs only at Period 1, and however, does not plague the retailer in Period 2.