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Auction and contracting mechanisms for channel coordination with consideration of participants’ risk attitudes. (English) Zbl 1364.90024

Summary: This paper considers a two-supplier one-retailer coordinated supply chain system with auction and contracting mechanism incorporating participants’ risk attitudes. The risk attitude is quantified using the value-at-risk (VaR) measure and the retailer faces a stochastic linear price-dependent demand function. In the supply chain, the suppliers (providing identical products) compete with each other in order to win the ordering contract of the retailer. Several auction and contracting mechanisms are developed and compared. It can be analytically shown that the retail price of the risk-averse system is higher than that of the risk-neutral system, but the order quantity is lower than that of the risk-neutral system.

MSC:

90B05 Inventory, storage, reservoirs
91B26 Auctions, bargaining, bidding and selling, and other market models
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