Study on new coordination mechanisms of generalized supply chains with loss-averse agents

Authors:
Yu Tian;Yan-Xue Gong;Shao-Chao Sun
Affiliations:
College of Logistics Engineering, Shanghai Maritime University, Shanghai, China;Research Institute of Automation, East China University of Science and Technology, Shanghai, China;Research Institute of Automation, East China University of Science and Technology, Shanghai, China
Venue:
CCDC'09 Proceedings of the 21st annual international conference on Chinese control and decision conference
Year:
2009

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Abstract

Behavioral factors become one of the main concerns of research on supply chains. The modeling and coordination issues are addressed among supply chains with loss-averse agents. Specifically, a generalized supply chain model is firstly established under the framework of Behavioral Decision Theory and Pareto Optimality, and then the optimal sharing rules and joint action pairs are successively derived. Furthermore, the coordination problem is examined in a two-stage specific case. It indicates that the limitation exists in traditional buyback and revenue sharing contracts, and two incentive restraint mechanisms based on gain-loss sharing contract are proposed to help accomplish the optimum performance.