Supply Chain Desicions Under Supplier Encroachment Considering Players’ Risk Preferences

With the rapid development of e-commerce,the unique advantages of direct marketing channels have become more and more prominent.Therefore,more and more manufacturers chose to introduce direct sales channels to form a dual-channel marketing model where traditional channels and network channels coexist.This paper uses operations management,game theory,behavior science and marketing theory to explore the optimal decision-making problems in the context of supplier encroachment,and analyzes the impact of players’ risk preferences behavior,information asymmetry and demand disruption on the optimal decisions in the supply chain.The main findings are stated as follows:Firstly,we consider that the manufacturer and the retailer in a dual-channel supply chain system have different risk preferences,namely risk aversion,risk neutral and risktaking,and use the Mean-CVa R method to measure the players’ risk attitudes.Using the Stackelberg game model led by the supplier,the optimal wholesale price,order quantity,direct inventory and optimal risk combinations are discussed through maximizing each player’s utility and the total utility of the supply chain.Further,we analyzes the influence of players’ different risk preferences,the supplier’s selling cost,and palyers’ selfish,aggressive and altruistic behaviors on the optimal decisions,risk combinations and players’ utilities in the supply chain.Next,we consider information asymmetry in contract design mechanism under the background of supplier encroachment,assuming that the retailer has risk aversion behavior,and use the CVa R method to measure the degree of risk aversion.By establishing the principal-agent model,the optimal contracts under different scenarios are obtained.When we assume that the retailer’s risk aversion is private information,three scenarios are considered: full information(CI),no information disclosure(ND,i.e.,pooling contract),and information disclosure(ID,ie,separating contract).We find that the retailer always prefers pooling contract,while the manufacturer always prefers separating contract,and information asymmetry always leads to inefficiency in supply chain.When we assume that the manufacturer’s cost information is asymmetric,the problem is divided into four scenarios based on whether the manufacturer choses to open the direct channel and whether or not the cost information is hidden.We discuss how the retailer’s risk aversion behavior,channel power,and manufacturer’s production cost impact the optimal contract and players’ profit.Finally,we consider the optimal pricing strategy and production planning adjustment strategy of a dual-channel supply chain before and after a demand disruption occurs with a risk-averse decision maker under the centralized and decentralized models.We find that the initial production plan is robust when the demand disruption is not large.Only when the demand disruption is large enough does the decision maker need to adjust the initial production plan.If the decision maker’s degree of risk aversion increases after a demand disruption occurs,the value of knowing the demand disruption is closely related to the decision maker’s degree of risk aversion before and after the demand disruption occurs.