Auction and contracting mechanisms for channel coordination with exponential demand functions. (2nd July 2016)

• Record Type: Journal Article
• Authors: Guo, Wei; Ma, Cheng
• Is Part Of: International journal of modelling & simulation. Volume 36:Number 3(2016)
• Page Start: 87
• Page End: 96
• Publication Date: 2016-07-02
• Subjects: Supply chain coordination -- auction mechanisms -- risk-adverse -- value-at-risk; Mathematical models -- Periodicals; Simulation methods -- Periodicals; Mathematical models; Simulation methods; Periodicals; 003.3
• DOI: 10.1080/02286203.2016.1199749
• Languages: English
• ISSNs: 0228-6203

Abstract

Abstract: This paper considers a supply chain system with two competing suppliers providing identical products or service to a retailer incorporating risk attitudes. The risk attitude is quantified using the value-at-risk measure and the retailer faces a stochastic exponential price-dependent demand function. Several simple situation and auction mechanisms are developed and compared. The results show that, for auction and two-part contracting mechanisms, the retailer and the low-cost supplier are cooperating together to maximize the total profit of the supply chain with complete information and asymmetric information; however, in this simple situation without complicated auction, the channel-coordinated system optimums cannot be achieved.