Emergency Quantity Discount Contract with Suppliers Risk Aversion under Stochastic Price

Shuangsheng Wu and Qi Li
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Shuangsheng Wu: School of Economics and Management, Tongji University, Shanghai 200092, China
Qi Li: School of Economics and Management, Tongji University, Shanghai 200092, China

Mathematics, 2021, vol. 9, issue 15, 1-12

Abstract: This paper constructs an emergency quantity discount contract to explore the inherent law of the contract coordinating the supply chain with stochastic market demand and price and the risk-averse supplier. Meanwhile, the conditional value-at-risk (CVaR) risk measure criterion is revised to study the influence of supplier’s risk aversion attitude on supply chain coordination. The results show that supplier risk aversion will cause the bifurcation of the relevant factors in the supply chain under the stochastic price. Within the bifurcation region, the supply chain cannot be coordinated; out of the bifurcation region, the supply chain can achieve coordination. The supply chain related factors’ variation range in the bifurcation region is related to the step size of the risk aversion factor and the normal distribution function’s variance of the market demand, and it increases with the latter.

Keywords: stochastic price; suppliers risk aversion; quantity discount contract; supply chain coordination; CVaR (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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