Seminar

Abstract

The literature has shown that supply chain performance is affected by the allocation of inventory risk. Traditionally, a pull supply chain generates a higher optimal order quantity and hence higher supply chain profit than a push supply chain when firms are risk neutral. Extended from the classic push and pull newsvendor models, this paper investigates the impact of firms’ risk averse attitudes on supply chain performance. Based on firms’ Conditional Value-at-Risk (CVaR), our analysis indicates that push can lead to a higher optimal order quantity than pull when the supplier is sufficiently more risk averse than the retailer. Meanwhile, pull contracts cannot always survive push challenge like in risk-neutral supply chains. We demonstrate that three-part tariff revenue sharing contracts can coordinate both the push and the pull supply chains to achieve the Pareto optimality maximizing combined supply chain CVaR.

Bio

Chen Jian is Lenovo Chair Professor and Chairman of Management Science Department, Director of Research Center for Contemporary Management, Tsinghua University. He received the B.Sc. degree in Electrical Engineering from Tsinghua University, Beijing, China, in 1983, and the M.Sc. and the Ph.D. degree both in Systems Engineering from the same University in 1986 and 1989, respectively. His main research interests include supply chain management, E-commerce, decision support systems. Dr. Chen has published over 200 papers in refereed journals and has been a principal investigator for about 50 grants or research contracts with National Science Foundation of China, governmental organizations and companies. He has been invited to present several plenary lectures at international conferences. He is the recipient of Ministry of Education Changjiang Scholars, Fudan Management Excellence Award, IBM Faculty Award, the Outstanding Contribution Award of IEEE Systems, Man and Cybernetics Society. He has also been elected to IEEE Fellow. He serves/served as a Regional VP of the Production and Operations Management Society (2010-2012), Chairman of the Service Systems and Organizations Technical Committee of IEEE Systems, Man and Cybernetics Society(2002-), Vice President of Systems Engineering Society of China(2006-2014), Vice President of China Society for Optimization and Overall Planning(2006-2014), a member of the Standing Committee of China Information Industry Association(1998-2016), Vice President of Chinese Research Council of Modern Management(2016-) and Vice President of Management Science and Engineering of China (2017-). He also serves/served as editor/area editor/associate editor/editorial board member for many international journals.