Based On Option Contract Model Of Risk Aversion And Coordination Of The Supply Chain Decisions

With the rapid development of economy and market environment, it is of much value in theory and practice to study the problem of risk decision-making and coordination in supply chain system. Based on the flexible option contracts model, this thesis studies deeply the risk averse decision-makers’optimal decisions and contracts coordination of supply chains using conditional value-at-risk and utility function as the evaluation criterion. The main results of the thesis are as follows:1. Based on the supply contracts model with call option, the risk-averse retailer’s optimal order decisions are studied. With respect to evaluating the retailer’s random profit, the objective function is constructed by the conditional value-at-risk approach. We get the explicit formula between the degree of risk aversion and his initial order decisions, and compare the conclusions with the wholesale price contract. Numerical experiments further analyze how the degree of risk aversion and other system parameters affect the retailer’s decisions. This model extends the scope of the risk-neutral problem to situations in which the retailer is risk averse, embracing the risk-neutral problem as a special case. On the other hand, the Conditional value at risk approach has better mathematical properties and computational characteristics than other risk measures.2. For the supply contract with bidirectional options by which the buyer can adjust the initial order both upward and downward, the risk-averse retailer’s optimal order decisions equations are derived. The bidirectional options are referred to as options that can be exercised as both calls and puts, which enable the retailer to gain more flexibility in order decisions and increase the difficulty of solving process. In particular, we obtain closed-form formulas to describe the retailer’s optimal policies when the demand is uniformly distributed and conduct numerical experiments. The study extends the scope of the risk-neutral problem to situations in which the retailer is risk averse. The numerical example provide the retailer valuable information, especially the impact of exercise price on his optimal strategy and the corresponding profit. 3. Based the flexible call option contracts, the coordination in a supply chain with one manufacture and one retailer is considered. Compared with the wholesale price contract, the pricing decision of the manufacture and the order decisions of the retailer under the option contracts are derived. An option contract set in which any option contract can coordinate the supply chain is gotten. It should be noted that, this study assume that the manufacture firstly plans its production quantity for its own interest, and then discus the coordination issue according to the retailer reserve order quantity, which improves the operational efficiency of the supply chain. Furthermore, taking into account the uncertain market demand, the decisions information is discussed in numerical examples when the demand is uniformly distributed and normal distributed respectively.4. Using the flexible call option contracts, the risk-averse supply chain coordination issue and the corresponding profit allocation problem are future studied. We take a cooperative game approach to analyze the ultimate implementation outcome of a coordinating contract. Taking into account the supply chain members’risk preferences, the Nash’s bargaining model is used. While considering the members’risk preferences and negotiating powers, the Eliashberg’s model is adopted. These operating models are more close to the supply chain in practice. Specific examples address the advantages of the concrete types of utility function in computing the coordinating contract parameters and profit allocation proportions.