Dual Channel Supply Chain Coordination of Loss-Averse Newsvendor and Pre-sale Mode with Contract

Abstract

This paper takes the dual-channel supply chain as the research background. Online supply adopts pre-sale strategy, while offline supply adopts inventory strategy and faces the newsvendor problem. The retailer is loss averse. We consider the decentralized decision making and retailer decision making and deduce the correlations between order quantity, price deviation and loss aversion. By the numerical analysis, we observed that the loss-aversion of retailer will make the members of the supply chain suffer losses. At last, we have verified that manufacturers cannot coordinate the supply chain with buyback contract. Furthermore, we achieve this goal with GLB which is an improved risk-sharing contract based on buyback and revenue sharing contract under certain conditions.