Mean-variance analysis of supply chains under wholesale pricing and profit sharing schemes

Ying Wei and Tsan-Ming Choi

European Journal of Operational Research, 2010, vol. 204, issue 2, 255-262

Abstract: In this paper, we explore the use of a wholesale pricing and profit sharing scheme (WPPS) for coordinating supply chains under the mean-variance (MV) decision framework. We first analytically establish the necessary and sufficient conditions for coordinating the centralized supply chain by WPPS. We then show that there exists a unique equilibrium of the Stackelberg game with WPPS in the decentralized case. After that, we discuss the information asymmetric case in which the retailer can be benefited by pretending to be more risk averse. Finally, we propose a new measure for the manufacturer to prevent this cheating from happening. Insights are generated.

Keywords: Supply; chain; management; Mean-variance; analysis; Supply; chain; coordination (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (50)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:204:y:2010:i:2:p:255-262

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