Push, Pull, and Supply Chain Coordination with Overconfident Retailers

Jian Zhang (), Shuang He () and Ying Zhang
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Jian Zhang: Inner Mongolia University of Finance and Economics
Shuang He: Inner Mongolia University of Finance and Economics
Ying Zhang: Inner Mongolia University of Finance and Economics

A chapter in LISS 2024, 2025, pp 137-156 from Springer

Abstract: Abstract In this paper, we investigate the impact of retailers’ overconfidence on the push and the pull supply chain performance. Traditionally, a pull supply chain generates a higher optimal order quantity and hence higher supply chain profit than a push supply chain when firms are entirely rational. Our analysis indicates that push can lead to a higher optimal order quantity than pull when the retailer is sufficiently overconfident. Meanwhile, with the increase of retailers’ overconfidence level, the optimal wholesale price of the push supply chain increases, the optimal order quantity approaches the mean of random demand, and the optimal wholesale price of the pull supply chain decreases, the optimal output decreases. We demonstrate that three-part tariff advance-purchase and revenue-sharing contracts can coordinate the push and the pull supply chains with overconfident retailers, respectively.

Keywords: push and pull supply chains; overconfidence; supply chain coordination; Newsvendor; supply chain contract (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-981-96-9697-0_12

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DOI: 10.1007/978-981-96-9697-0_12

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