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Analysing consumer RP in a dual-channel supply chain with a risk-averse retailer

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  • Yushan Jiang
  • Bo Li
  • Dongping Song

Abstract

This paper investigates a dual-channel supply chain consisting of a risk-neutral manufacturer and a risk-averse retailer. The manufacturer offers a consumer RP in the online channel, in which consumers face valuation uncertainty. We use conditional value-at-risk (CVaR) criterion to evaluate the risk-averse behaviour of the retailer. We examine how consumer RP and risk-averse behaviour influence the equilibrium solutions and supply chain agents' performance. It is shown that the manufacturer's optimal RP is related to consumer types. If the consumer has a moderate valuation of the product, the optimal RP depending on the retailer's risk-averse level. We observe a counter-intuitive phenomenon; the retailer's expected utility may increase under the double pressure of manufacturer encroachment and better returns service. Furthermore, a buyback revenue-sharing contract is offered to coordinate the dual-channel supply chain when the refund is endogenous. Finally, we explore several extensions. [Received 25 July 2015; Revised 27 October 2016; Accepted 13 November 2016]

Suggested Citation

  • Yushan Jiang & Bo Li & Dongping Song, 2017. "Analysing consumer RP in a dual-channel supply chain with a risk-averse retailer," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 11(3), pages 271-302.
    • Handle: RePEc:ids:eujine:v:11:y:2017:i:3:p:271-302
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    Cited by:

    1. Taiguang Gao & Kui Wang & Yali Mei & Shan He & Yanfang Wang, 2022. "Supply Chain Pricing Models Considering Risk Attitudes under Free-Riding Behavior," Mathematics, MDPI, vol. 10(10), pages 1-22, May.
    2. Li, Bo & Jiang, Yushan, 2019. "Impacts of returns policy under supplier encroachment with risk-averse retailer," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 104-115.

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