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Emergency Quantity Discount Contract with Suppliers Risk Aversion under Stochastic Price

Author

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  • Shuangsheng Wu

    (School of Economics and Management, Tongji University, Shanghai 200092, China)

  • Qi Li

    (School of Economics and Management, Tongji University, Shanghai 200092, China)

Abstract

This paper constructs an emergency quantity discount contract to explore the inherent law of the contract coordinating the supply chain with stochastic market demand and price and the risk-averse supplier. Meanwhile, the conditional value-at-risk (CVaR) risk measure criterion is revised to study the influence of supplier’s risk aversion attitude on supply chain coordination. The results show that supplier risk aversion will cause the bifurcation of the relevant factors in the supply chain under the stochastic price. Within the bifurcation region, the supply chain cannot be coordinated; out of the bifurcation region, the supply chain can achieve coordination. The supply chain related factors’ variation range in the bifurcation region is related to the step size of the risk aversion factor and the normal distribution function’s variance of the market demand, and it increases with the latter.

Suggested Citation

  • Shuangsheng Wu & Qi Li, 2021. "Emergency Quantity Discount Contract with Suppliers Risk Aversion under Stochastic Price," Mathematics, MDPI, vol. 9(15), pages 1-12, July.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:15:p:1791-:d:603488
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    References listed on IDEAS

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