Performance optimization of supply chain based on cooperative contract with disappointment-aversion strategic consumers

Ji Quan (), Xiaofeng Wang, Xianjia Wang, Xia De and Jian-Bo Yang
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Ji Quan: Wuhan University of Technology
Xiaofeng Wang: Wuhan University of Technology
Xianjia Wang: Wuhan University
Xia De: Wuhan University of Technology
Jian-Bo Yang: The University of Manchester

Flexible Services and Manufacturing Journal, 2022, vol. 34, issue 2, No 7, 408-428

Abstract: Abstract Consumers’ strategic behavior and psychological perception have impact on supply chains. In this paper, we consider a supply chain with one supplier and one retailer to study the influence of disappointment-aversion strategic (DAS) consumers on supply chain members’ decisions and performance. The results of this study show that strategic consumers can reduce the profit levels of such a supply chain, whilst DAS consumers can alleviate this effect. We also study the effectiveness of a quantity commitment strategy for a centralized supply chain when faced with DAS consumers. Under certain conditions, the quantity commitment strategy can further reduce the loss of profit caused by strategic consumers. Then the maximum profit of the centralized supply chain under the quantity commitment strategy is used as a benchmark. We then analyze the coordination efficiency and implementability of a wholesale price contract and a price subsidy contract respectively in a decentralized supply chain. The results show that the wholesale price contract can achieve the optimal profit benchmark of the centralized supply chain, but it can only realize fixed profit allocation to supply chain members; the price subsidy contract can not only achieve the optimal profit of the centralized supply chain but also make arbitrary profit allocation among chain members.

Keywords: Supply chain management; Disappointment-aversion strategic consumer; Quantity commitment; Newsvendor model; Cooperative contract (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10696-021-09419-6

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