Modeling for Rebate and Penalty Contract with Retailer's Combined Decision Bias

摘要

This paper considers a supply chain model in which a single supplier sells a single product to a single retailer who faces the newsvendor problem.We establish the supply chain with retailer's combined decision bias,and analyze how the retailer's bias affects his order quantity and the contract parameter.The results show that the supply chain can achieve channel coordination with rebate and penalty contract,the rebate and penalty quotiety increases as the retailer's waste-averse preferences increases and decreases as stockout-averse preferences increases.With the numerical examples,we demonstrate that the retailer's expected profit and utility of rebate and penalty are more than that of the decentralized decision making system.