Wholesale Price for Supply Chain Coordination via Conditional Value-at-Risk Minimization

Chuan Xu Wang

doi:10.4028/www.scientific.net/AMM.20-23.88

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HomeApplied Mechanics and MaterialsApplied Mechanics and Materials Vols. 20-23Wholesale Price for Supply Chain Coordination via...

Wholesale Price for Supply Chain Coordination via Conditional Value-at-Risk Minimization

Abstract:

The theory of the conditional value-at-risk (CVaR) in financial risk management is considered in this paper to develop a model of supply chain coordination with a wholesale pricing policy. The proposed model solves the drawbacks of objective function in current supply chain coordination model. A numerical example is given to demonstrate the effectiveness of the proposed model. The following helpful conclusions are drawn from the paper: with the increase of the degree of risk averting for supply chain individual member, the optimal order quantity of supply chain is decreasing, while the optimal profit is decreasing; If supplier’s risk averting degree increases, supplier has to increase wholesale price to achieve supply chain coordination; If retailer’s risk averting degree increases, supplier has to decrease wholesale price to achieve supply chain coordination.

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Periodical:

Applied Mechanics and Materials (Volumes 20-23)

Pages:

88-93

DOI:

https://doi.org/10.4028/www.scientific.net/AMM.20-23.88

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Online since:

January 2010

Authors:

Chuan Xu Wang

Keywords:

Conditional Value-At-Risk, Optimization, Risk Management (RM), Supply Chain Coordination

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