A Supply Chain Coordination Based on Wholesale Price Contract under Psychological Deviation and Stochastic Demand

doi:10.3969/j.issn.1007-7375.2020.01.010

Abstract

Abstract: Based on the social comparative theory in behavioral economics, the concept of positive and negative psychological deviation is put forward, and a supply chain effect model is established in the case of positive and negative psychological deviation. The optimal ordering strategy for two types of retailers is discussed, and the influence of positive psychological deviation index, retailer’s exogenous force parameter and negative psychological deviation index on the optimal ordering strategy under the two types of circumstances is analyzed. The conditions for supply chain coordination are discussed in the context of wholesale price contracts. The theory and example analysis show that when the retailer has positive psychological deviation, the retailer effect changes to be a U type with the increase of the positive psychological deviation index. Under certain conditions, the wholesale price contract can make the supply chain coordinate. When the retailer has negative psychological deviation, the order quantity decreases with the increase of the negative psychological deviation index, and decreases with the increase of the external influence parameters. Whether with the negative psychological deviation index or with the manufacturer’s external power parameters, the supply chain cannot be coordinated. The influence of irrational factors on the ordering strategy in the decision-making process is discussed. The conclusions can provide guidance for ordering practice and enrich the research of behavior operation.

Key words: stochastic demand, positive psychological bias, negative psychological bias

CLC Number:

F272
F224.32

FU Kaifang, WANG Hongqi, ZHOU Guolin, CHEN Zhixiang, PENG Jianping. A Supply Chain Coordination Based on Wholesale Price Contract under Psychological Deviation and Stochastic Demand[J]. Industrial Engineering Journal, 2020, 23(1): 73-80.

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