On Revenue Sharing Contract in Loss Aversion Supply Chain under

Abstract

Abstract: A two stage supply chain composed of a risk neutral supplier and a loss aversion retailer is discussed in this paper. With revenue sharing contract as coordination means, the supply chain coordinate problem under sudden disruptions is studied. By using the loss averse model to describe the loss aversion level of the retailer, the profit of the supply chain is analyzed under both decentralized and centralized control modes. Results show that, by using revenue sharing contract, such a supply chain can be coordinated. To do so, the range of the contract parameter value increases as the level of the lossaversion of the retailer increases. A numerical example is used to verify the results obtained in this paper.

Key words: supply chain coordination, loss aversion, disruption;revenue sharing contract

Shi Guohong1，Zeng Yuefeng1, Chen Jingxian2. On Revenue Sharing Contract in Loss Aversion Supply Chain under[J]. Industrial Engineering Journal , 2012, 15(2): 22-26.

References

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