Optimal ordering and disposing policies in the presence of an overconfident retailer: a Stackelberg game
type: Item
instance of: scholarly article
title: Optimal ordering and disposing policies in the presence of an overconfident retailer: a Stackelberg game
zbMATH Open document ID: 1394.90056
DOI: 10.1155/2015/385289
author: Zhenchao Zhang
author: Chang You
author: Zhigang Wang
author: Chunfa Li
author: Lei Xu
published in: Mathematical Problems in Engineering
publication date: 2018-08-27T00:00:00Z
review text: Summary: This paper investigates the impact of the retailer's overconfident behavior on supply chain performance. We start with a basic model on the rational newsvendor model and investigate the retailer's optimal ordering decision and expected profit. Next, we extend the basic model and introduce an overconfident retailer. We find that the retailer's overconfident behavior does not necessarily damage the supply chain compared with the basic model when the overconfident level does not exceed a threshold. We also design the cooperation and buyback mechanism and conduct numerical analysis to compare the manufacturer's and retailer's expected profits and real profits with those in the basic newsvendor model. It can achieve Pareto improvement in the supply chain when the overconfident level is low. When the retailer's overconfident level exceeds a threshold, the retailer's ordering decision cannot make the whole supply chain sustainable development.
Mathematics Subject Classification ID: 90B05
Mathematics Subject Classification ID: 91A65
zbMATH DE Number: 6926234
MaRDI profile type: Publication
Wikidata QID: Q59118268
full work available at URL: https://doi.org/10.1155/2015/385289
OpenAlex ID: W2037883659
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description: scientific article; zbMATH DE number 6926234