Coordination mechanism of logistic service supply chain: a perspective of presale sinking and risk aversion

Abstract

Many retailers are implementing presale strategies with logistics integrator for presale sinking, and pre-distributing products to sinking sites in advance, to conveniently and efficiently deliver to customers. This paper explores the influence of presale strategies and risk-averse behaviour on decisions and profits of the logistics integrator in the context of demand updating. The paper finds that when retailer adopts presale strategies with a larger discount, all potential customers will pre-order in the first period; otherwise, all potential customers will buy in the second period. These presale strategies can increase the pre-distribution volume and utility of the logistics integrator. While the risk-averse behaviour leads to a decrease in the pre-delivery volume, the utility of logistics integrator increases. Under these presale strategies, high discounts can eliminate the impact of uncertain demand risk, while presale strategies with low discounts cannot. [Submitted: 24 October 2021; Accepted: 3 February 2022]