Study On Supply Chain Coordination Contract Based On VMI And RMI Under The Downside-risk Measurement

There are many researches about designing contract schemes to coordinate the supply chain under different situations.However,few studies consider and quantize the supply chain members' risk attitudes.This article focuses on the two-echelon supply chain system considering that one member has a risk aversion attitude.The optimization of the supply chain is further investigated.Our work can extend the recent researches of the supply chain coordination by considering risk attitudes.Moreover,it can provide some basis for the management of related enterprises in the supply chain.The main research contents are as follows:(1)The paper introduces the downside-risk measurement method to quantize the supplier's risk-averse attitude.VMI(Vendor Managed Inventory)mode is applied.We find that the supplier's risk-averse attitude has a significant impact on the operation of the entire system.when considering the supplier's attitude,it is difficult to coordinate the supply chain with a subsidy contract.Then,a joint contract is introduced to achieve the supply chain coordination.And the Pareto improvement of the supply chain is also achieved.Finally,numerical analysis is conducted to illustrate the accuracy of above findings.(2)This paper further considers a two-echelon supply chain system under RMI mode,which consisting of a risk-averse retailer and a risk-neutral supplier.Downside-risk measurement method is also applied in this model.We also find that it is difficult to coordinate supply chain due to the supply member's risk-averse attitude by a subsidy contract.Then,a subsidy contract combined with a proper contract is introduced to coordinate the supply chain and achieve the Pareto improvement.Finally,numerical analysis is conducted to illustrate the accuracy of above findings.