IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v38y2017i4p565-580.html
   My bibliography  Save this article

Decentralized Supply Chain Decisions on Lead Time Quote and Pricing with a Risk‐averse Supplier

Author

Listed:
  • Weichun Chen
  • Bo Li
  • Dongping Song
  • Qinghua Li

Abstract

We consider a decentralized supply chain containing a risk‐averse supplier and a risk‐neutral retailer with lead time‐sensitive and price‐sensitive demands. A Stackelberg game is employed to model the lead time quote and pricing decision process between the two members under the conditional value‐at‐risk criterion. A unique equilibrium is obtained. Using the corresponding centralized mode as a benchmark, we find that a less risk‐averse supplier is better to cooperate and share risk with the retailer to improve the entire supply chain's efficiency. With a uniformly distributed realized lead time, the impact of the supplier's risk aversion on the decisions can be characterized by a few threshold values of the late delivery penalty cost. In particular, when the unit delay penalty cost exceeds a certain level, a more risk‐averse supplier will counter‐intuitively quote a shorter lead time by risking a higher delay penalty cost. Copyright © 2016 John Wiley & Sons, Ltd.

Suggested Citation

  • Weichun Chen & Bo Li & Dongping Song & Qinghua Li, 2017. "Decentralized Supply Chain Decisions on Lead Time Quote and Pricing with a Risk‐averse Supplier," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(4), pages 565-580, June.
    • Handle: RePEc:wly:mgtdec:v:38:y:2017:i:4:p:565-580
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Qiang & Wu, Jie & Zhao, Nenggui, 2022. "Optimal operational policies of a dual-channel supply chain considering return service," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 199(C), pages 414-437.
    2. Shi‐Woei Lin & Januardi, 2023. "Two‐stage pricing of perishable food supply chain with quality‐keeping and waste reduction efforts," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1749-1766, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:38:y:2017:i:4:p:565-580. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.