• Media type: E-Article
  • Title: Two revenue sharing contracts in a three-echelon supply chain with a risk-neutral or a risk-averse retailer
  • Contributor: Hou, Yumei [Author]; Wei, Fangfang [Author]; Tian, Xin [Author]; Liu, Xiaoyun [Author]
  • Published: Barcelona: OmniaScience, 2015
  • Language: English
  • DOI: https://doi.org/10.3926/jiem.1556
  • Keywords: three-echelon ; supply chain ; risk-aversion ; revenue-sharing contract
  • Origination:
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  • Description: Purpose: This paper compares the efficiency of two revenue-sharing contracts and discusses the members' preference for a three-echelon supply chain with the retailer's different risk attitude. Design/methodology/approach: This paper focuses on a three-echelon supply chain with a manufacturer, a distributor and a retailer. If the retailer is risk-neutral, the coordination of the supply chain based on the two revenue-sharing contracts is comparatively studied. If the retailer is downside-risk-aversion, the supply chain performance is comparatively analyzed and a risk-sharing contract is designed to coordinate the supply chain. Finally, the two revenue-sharing contracts under the risk-sharing contract are still compared. Findings: Although both the two revenue-sharing contracts can coordinate the supply chain with a risk-neutral retailer, they are not always able to coordinate the supply chain with a risk-averse retailer. It is interesting that the supply chain with a risk-averse retailer can be coordinated by executing a designed risk-sharing contract, which is based on any kind of revenue-sharing contract. Finally, any kind of revenue-sharing contracts is not absolutely better than another. Based on the risk-sharing contract, the retailer's preference is equivalent between the two contracts; but for the distributor and the manufacturer, their preferences between the two contracts are positively related to their own profit share in the supply chain.
  • Access State: Open Access