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A multi-period supply chain network equilibrium model considering retailers’ uncertain demands and dynamic loss-averse behaviors

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  • Zhou, Yan
  • Chan, Chi Kin
  • Wong, Kar Hung

Abstract

This study constructs an equilibrium model of a multi-period supply chain network with uncertain demand. In the multi-period equilibrium model, we consider not only retailers’ static loss-averse behaviors, but also their dynamic loss-averse behaviors, in which retailers dynamically adjust their loss-averse parameters according to their gains or losses over the production periods. The equilibrium conditions of the various decision makers and the network are established by the finite-dimensional variational inequality. Finally, numerical examples are solved to show how retailers’ loss-averse behaviors would affect decisions, profits of manufacturers and utilities of retailers at equilibrium when compared with their loss-neutral behaviors.

Suggested Citation

  • Zhou, Yan & Chan, Chi Kin & Wong, Kar Hung, 2018. "A multi-period supply chain network equilibrium model considering retailers’ uncertain demands and dynamic loss-averse behaviors," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 51-76.
    • Handle: RePEc:eee:transe:v:118:y:2018:i:c:p:51-76
    DOI: 10.1016/j.tre.2018.06.006
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