Journal
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
Volume 106, Issue -, Pages 255-275Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.tre.2017.08.005
Keywords
Capacity investment; Risk averse; Coordination; Nash bargaining
Categories
Funding
- National Natural Science Foundation of China [71273124]
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In a supply chain with one risk neutral manufacturer and one risk averse supplier, we propose a risk diversification contract under which the manufacturer shares the losses of excess capacity and inadequate capacity with the supplier, and a side payment is transferred from the supplier to the manufacturer. Under the Conditional Value-at-Risk (CVaR) criterion, risk diversification contract has a Pareto improvement and can allocate system performance appropriately in both symmetrical and asymmetrical demand information. In addition, this contract can coordinate supply chain and has a larger market than an option, capacity reservation, payback, revenue-sharing contract under the symmetrical demand information. (C) 2017 Published by Elsevier Ltd.
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