Near-optimal algorithm for the EOQ equilibrium of a supply chain with risk-averse retailers
We develop a dynamic game model of a supply chain with one risk-neutral supplier and two risk-averse retailers competing in price and service,where the EOQ production-inventory policy is adopted. A near- optimal algorithm is given to solve the EOQ equilibrium. By applying the algorithm to numerical examples,we find that the higher the risk-averse level of one retailer,the lower his optimal retail price and service level. However,the effect of risk aversion on the rival retailer depends on the magnitude of the substitutability of the products. The substitutability has a positive impact on the decisions of all members and the annul expected profit of the supplier. The suppliers wholesale price is insensitive to the retailers risk aversions (demand uncertainties) and service cost efficiencies while her performance increases with the risk aversions and decreases with the service-cost coefficients.
price-service competition inventory EOQ demand uncertainty risk aversion
Danqin Yang Tiaojun Xiao Houcai Shen
School of Management Science and Engineering,Nanjing University,Nanjing 210093,China
国际会议
The First International Conference on Management Innovation(ICMI 2007)(管理创新会议)
上海
英文
84-89
2007-06-04(万方平台首次上网日期,不代表论文的发表时间)