Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
480481 | European Journal of Operational Research | 2010 | 7 Pages |
Abstract
We propose an insurance contract under which the supplier shares the risk of overstock and understock with the retailer, improving the efficiency of the supply chain with a newsvendor-type product. We first show that the insurance contract could coordinate the supply chain, and obtain bargaining solution in the supply chain model. Then we investigate the effects of agents’ risk aversion on the supply chain model and acquire the Pareto-optimal solution through the mean–variance approach. After that, we compare the insurance contract with the revenue sharing contract, focusing particularly on their differences. Finally, extensive numerical studies are conducted, and managerial implications are proposed.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Zhibing Lin, Chen Cai, Baoguang Xu,