Manufacturer's return policy for two risk-averse competing retailers

Yu Ting Lu, Chung-Chi Hsieh, Cheng Hung Li

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

This paper studies the manufacturer's return policy and the retailers' decisions in a supply chain consisting of one manufacturer and two competing and risk-averse retailers under a single-period framework. The manufacturer sells her short-life-cycle products through two competing retailers, and the product demand is random and sensitive to the retailers' selling prices. We incorporate the risk measure CVaR into the supply chain model to characterize risk-averse retailers so that the retailers' decisions are based upon risk minimization rather than expected profit maximization. We also model the interaction of the manufacturer and the retailers as a manufacturer-Stackelberg game in which the manufacturer acts as a Stackelberg leader, and the retailers act as followers and engage in a simultaneous-move subgame. We conduct a numerical analysis, focusing on identical retailers and a particular demand distribution, and discusses the effects of risk aversion on the chain members' decisions and profits.

Original languageEnglish
Title of host publication3rd International Conference on Innovative Computing Information and Control, ICICIC'08
DOIs
Publication statusPublished - 2008
Event3rd International Conference on Innovative Computing Information and Control, ICICIC'08 - Dalian, Liaoning, China
Duration: 2008 Jun 182008 Jun 20

Other

Other3rd International Conference on Innovative Computing Information and Control, ICICIC'08
CountryChina
CityDalian, Liaoning
Period08-06-1808-06-20

All Science Journal Classification (ASJC) codes

  • Computer Science Applications
  • Software
  • Control and Systems Engineering

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  • Cite this

    Lu, Y. T., Hsieh, C-C., & Li, C. H. (2008). Manufacturer's return policy for two risk-averse competing retailers. In 3rd International Conference on Innovative Computing Information and Control, ICICIC'08 [4603316] https://doi.org/10.1109/ICICIC.2008.344