Article ID Journal Published Year Pages File Type
5110406 Transportation Research Part E: Logistics and Transportation Review 2017 21 Pages PDF
Abstract
In a supply chain with one risk neutral manufacturer and one risk averse supplier, we propose a risk diversification contract under which the manufacturer shares the losses of excess capacity and inadequate capacity with the supplier, and a side payment is transferred from the supplier to the manufacturer. Under the Conditional Value-at-Risk (CVaR) criterion, risk diversification contract has a Pareto improvement and can allocate system performance appropriately in both symmetrical and asymmetrical demand information. In addition, this contract can coordinate supply chain and has a larger market than an option, capacity reservation, payback, revenue-sharing contract under the symmetrical demand information.
Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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