Supply Chain Optimal Decision And Coordination Analysis Under Heterogeneous Preference

With the economic globalization, market competition has gradually become the competition between supply chains. Supply chain management not only requires each enterprise in the supply chain to achieve itself optimization, but also need each enterprise obtain the overall optimal performance through the way of highly coordination and cooperation, and then to better serve the customer market. Supply chain often face a high degree of uncertainty in the market environment, which leading to the enterprises have greater risk in the process of decision making. Enterprises have different risk attitudes and behavior preferences when facing risk. Based on the supply chain risk management, through behavior of heterogeneous preferences to investigate the relevant theories and methods of supply chain optimization and coordination, and the optimization problems between manufacturers and suppliers, there are important theory value and practical significance to the entire supply chain’s optimization. Through induction and development of the available relevant theory and methods, this paper employs heterogeneous preferences to research the supply chain optimization and coordination, and to discuss the procurement optimization decision of retailer and two level supply chain coordination problems.Firstly, the article analyzes multiple product procurement optimization decision problems of endogenous preferences. Most of the articles were only discussed the single product purchase decision, this paper studies the optimization model of multi-product purchase which is closely to the real decision environment, we define the exogenous and endogenous preference preferences in the study of decision-making behavior and analysis the more product purchase decision respectively by these two kinds of behavior factors. By the exponential utility function in exogenous preference circumstances to determine the objective function of decision makers, and endogenous preferences through the attenuation function to determine the objective function to establish the model. Through the comparative analysis, this paper gets the similar risk-averse retailer procurement attenuation method:compared with the decision maker’s risk neutral, the optimal order quantity of the optimal order quantity maximum attenuation function retailer is lower than the retailer’s optimal order quantity of the risk neutral without decision preference. Because of the loss aversion coefficient of retailer in function, this paper doesn’t find that retailers’purchase quantity will decrease with the risk aversion coefficient increases. It will be more in line with the behavioral finance hypothesis of human through the attenuation function method to get the endogenous preference coefficient, which lead to the decision makers of retailers and the utility function have different purchasing behavior.Secondly, this paper studies the coordination problems between single loss-averse retailer and manufacturer in supply chain. From the perspective of loss aversion retailers, we construct the buy-back contract to achieve supply chain coordination state through the research object of the supply chain coordination involved by single retailer who has the decision preference. This paper determines the range of loss averse buyback contract parameters and variation by the comparative analysis of the retailers’risk-neutral and risk-averse which will achieve supply chain coordination through the buy-back contract. In addition, the results find that the optimal order quantity of retailers when they are loss aversion will be smaller than the risk neutral, and the retailer’s order quantity is less when the degree of loss aversion is higher.Thirdly, the paper researches the coordination problems between the multiple loss-averse retailer and manufacturer in supply chain. The above analysis of single loss-averse retailer in the supply chain coordination problems doesn’t involve many subjects in actual economic life. As we all know that the supply chain is a complex system involving many participants, time and space. Therefore, this article analyzes the supply chain coordination state by establishing the buy-back contract made by two loss-averse retailers and suppliers. The result considers the supply chain system will achieve coordination when the total order quantity of retailers’in decentralized decision making will be equal to the quantity of retailers’in integrated. Therefore, this paper constructs the optimal order quantity model and discusses the relationship between the existence of the optimal solution model and the order quantities of two retailers, and then gets the relationship between the optimal order quantity of retailers and buy-back contract parameters.Finally, this article analyzes the supplier selection and development of optimal decision-making problems of heterogeneous preferences. While the uncertainty of market environment also make the supplier development has a huge risk, supplier development has become a new research trend of the relationship between suppliers. According to Talluri, this paper applies the application of portfolio theory to supplier development and constructs heterogeneous preferences supplier development control risk decision optimization model. By using the attenuation function method to solve the heterogeneous preferences of decision makers, the paper hypotheses the supplier development decision is such a loss aversion. This model explains the fastest speed decay to zero in order to avoid the risk of loss and then to achieve supplier development strategy optimization.The above research results not only enrich the theory of supply chain optimization and coordination, but also promote the use of models in practice and provide more scientific and theoretical basis for the decision-makers.