Decision-making And Coordination Considering Fairness Concerns With Disagreement Point In Supply Chain Contracts

Behavioral operations management which combines operation management with the behavioral research of "bounded rationality" has became a new research field. As a hot topic of operation management, supply chain management is necessary to combine with behavioral theory. This paper makes fairness concerns to be the point of research during many behavioral factors such as risk aversion and loss aversion preference, and then takes some discussion and analysis about the decision-making and the coordination of supply chain.This paper considers a simple two-level supply chain with a single supplier and a single retailer, analyzes the impact of fairness concerns to optimal decision-making by using game theory, and then explores the possibility and the conditions of the coordination. Firstly, Chapter 2 introduces related theory about supply chain management and behavioral research, analyzes the advantages and disadvantages of fair utility model, and then puts forward the innovation of this paper; Secondly, Chapter 3 builds a model with a more reasonable reference standard by importing the breakdown point in Nash bargaining model to describe a competition market. And then discusses the influence on decision-making and coordination of the supply chain respectively in the wholesale price contract, buy-back contract and revenue sharing contract based on Stackelberg game model. Thirdly, Chapter 4 uses specific distribution function to simulate and analyze data. On the one hand, conclusion in the third chapter is verified by the data; on the other hand, the related properties of some important parameters such as the supply chain efficiency and suppliers share have been discusses. The content of the article is clear and highlighted through this structure.Innovations and contributions of this thesis are briefly summarized as follow:(l)The model for Nash bargaining fairness with disagreement point can describe reality better.(2)This paper analyzes and compares how the decision-making changes while the wholesale price is exogenous and endogenous by considering the Stackelberg game in three contracts; and then finds that:when the wholesale price is endogenous, the role of disagreement point will be weakened.(3)In those three contracts, if the fairness and breakdown point are considered, the supply chain cannot be coordinated at equilibria.(4)The supply chain can be coordinated if the markdown-money policies are used, and the effect is best in the wholesale price contract.(5)Some other important parameters are described through the numerical analysis, and some rules are found, such as the influence on supply chain performance is completely opposite by improving retailer’s and supplier’s disagreement point.