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Push, Pull, and Supply Chain Coordination with Overconfident Retailers

Author

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  • Jian Zhang

    (Inner Mongolia University of Finance and Economics)

  • Shuang He

    (Inner Mongolia University of Finance and Economics)

  • Ying Zhang

    (Inner Mongolia University of Finance and Economics)

Abstract

In this paper, we investigate the impact of retailers’ overconfidence on the push and the pull supply chain performance. Traditionally, a pull supply chain generates a higher optimal order quantity and hence higher supply chain profit than a push supply chain when firms are entirely rational. Our analysis indicates that push can lead to a higher optimal order quantity than pull when the retailer is sufficiently overconfident. Meanwhile, with the increase of retailers’ overconfidence level, the optimal wholesale price of the push supply chain increases, the optimal order quantity approaches the mean of random demand, and the optimal wholesale price of the pull supply chain decreases, the optimal output decreases. We demonstrate that three-part tariff advance-purchase and revenue-sharing contracts can coordinate the push and the pull supply chains with overconfident retailers, respectively.

Suggested Citation

  • Jian Zhang & Shuang He & Ying Zhang, 2025. "Push, Pull, and Supply Chain Coordination with Overconfident Retailers," Lecture Notes in Operations Research,, Springer.
    • Handle: RePEc:spr:lnopch:978-981-96-9697-0_12
    DOI: 10.1007/978-981-96-9697-0_12
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