Supply Chain Coordination Model with Retailerfs Risk Attitudes

One of the major concerns in supply chain management is the coordination among various members of a supply chain comprising suppliers, manufacturers, distributors, wholesalers and retailers. We consider a newsvendor model in a two level supply chain with one supplier and one retailer. In this model, the retailer must order the item from the supplier prior to the selling season. Due to the short selling season and long replenishment lead time, the retailer is unable to reorder the item by using actual sales data generated from the early part of the season. The purpose of this paper is to discuss the eect of the attitudes toward risk of the members on the coordination in a supply chain. Using the risk averse utility functions, we show that, the risk averse retailer's optimal order quantity is less than or equal to that of a risk neutral one, when the goodwill penalty cost is ignored. We also explore the relationship between the retailer's order quantity and the risk aversion function in a special case.Supply chain management, Newsvendor model, Risk aversion.

Cooperation between two suppliers and a common retailer

Over past few years, supply chain coordination has been widely studied and numerous practitioners and researchers proposed many models on this field. Although many previous studies addressed channel competition considering a scenario with an exclusive retailer with only one producer’s brand, in real world the retailers sell various products with different brands. This study was to analyze the relation between two suppliers and a common retailer by taking various degree of product sustainability into account. The market is considered to be duopoly. This thesis describes modifying and implementation of a supply chain coordinator tool in order to enhance the profit earned by any of the parties involved in this supply chain. In this thesis we present a cooperation and collaboration model in a supply chain consisting of two suppliers with a common retailer. We establish the conditions for cooperation in such scenario with popular supply chain contracts. Even though other methods have been reviewed under various scenarios, we confine our interest to apply a coordinating contract and analyse the results. The type of the contract that can coordinate the supply chain is debatable and it needs to be analyzed depending on the limitations. The methodological approach taken in this study is modifying a contract in order to coordinate the supply chain and leads to better off for all parties. First we consider the classical model then the whole sale price contract is applied. Later in order to enable the supply chain coordination, facility sharing contract and franchise contract have been modified and implemented. Finally by illustrating the results of implementing each contract, a framework is presented. In this study the linear demand function is used because of tractability in providing analytical results while in real case the nonlinear demand function is widely used