Research On Two-stage And Risk-averse Supply Chain Coordination With Conditional Value At Risk

Much of the traditional research on supply chain coordination is based on the risk-neutral case. However, in recent years, due to increasingly complexed market environment, the uncertainties supply chain facing is getting more and more. As a result, the risks management of supply chain is now an important problem in the research of supply chain management.Firstly, this paper introduces the relevant theoretical basis about Value-at-Risk and Conditional Value-at-Risk.Secondly, this paper establishes risk-neutral supply chain, that is, both retailers and manufacturers are risk-neutral, and adopts repurchase contract to coordinate supply chain, then it obtains the optimal order and optimal repurchase prices.Then, this paper establishes two kinds of CVaR models of risk-aversion supply chain, where only retailer is risk-aversion or both parties are risk-aversion, respectively adopts repurchase contract to coordinate supply chains, and calculates the corresponding optimal order and optimal repurchase price. Finally, through the relative analysis to risk-neutral supply chain model, the paper obtains conclusion about the influence that risk attitude of members play on supply chain coordination as follows:(1) Providing the manufacturer is risk-neutral, the optimal order when the retailer avoids risk is less than the one when the retailer is risk-neutral, and it decreases as largely as the retailer avoids risk hardly. The manufacturer need to provide higher repurchase price to coordinate supply chain when the retailer is risk-averse, and the optimal repurchase price increases as the retailer avoids risk hardly.(2) The optimal order when the retailer and manufacturer are both risk-aversion is less than the one when both are risk-neutral, and it decreases as the retailer and manufacturer both avoid risk hardly. The optimal repurchase price increases as the retailer avoids risk hardly, and decreases as the manufacturer avoids risk hardly. When the retailer avoids risk more hardly than the manufacturer, the manufacturer should provide higher repurchase price than the risk-neutral one; when the retailer avoids risk as hardly as the manufacturer, the optimal repurchase price is the same; when the retailer avoids risk less hardly than the manufacturer, the optimal repurchase price is lower.