Research on coordination contract with two ordering opportunities under CVaR criterion

Abstract

In this study, we analyze a two-echelon supply chain, consisting of one risk neutral retailer as Stackelberg leader and one risk averse manufacture as follower. The retailer has two ordering opportunities and the manufacture has to pay stockout penalty in second order. Conditional Value-at-Risk (CVaR) is used to measure the manufacturer's degree of risk aversion. The research shows how the risk attitudes affect the optimal decision of the supply chain members, and how the retailer provide incentives to the manufacture, to reach win-win coordinated result.