Abstract: Based on the newsvendor model for traditional strategic consumers, the effect of consumers risk preference on supply chain coordination is addressed in this paper. By introducing the risk preference coefficient, it is shown that consumers  risk preference results in the decrease of seller’s optimal price and the optimal order quantity as well, thereby reduces the supply chain benefits. To solve this problem, a twopart tariff strategy is put forward in considering consumers  risk preference. By this new strategy, with the same risk preference, the optimal price decreases as the order quantity increases. In this way, while the consumers gain more surplus value, the profit of the whole supply chain is increased. The results obtained are verified by an example.

Key words: upply chain coordination, risk preference, strategic consumer, newsvendor model