Dual-channel Supply Chain Network Equilibrium Model Under Retailers’ Risk Aversion

Authors

Hongchun Wang, School of Urban Economics and Management, Beijing University of Civil Engineering and Architecture, Beijing 100044, China
Caifeng Lin, School of Urban Economics and Management, Beijing University of Civil Engineering and Architecture, Beijing 100044, China
Xinyi He, School of Urban Economics and Management, Beijing University of Civil Engineering and Architecture, Beijing 100044, China
Haiyue Yin, School of Urban Economics and Management, Beijing University of Civil Engineering and Architecture, Beijing 100044, China

Abstract

Abstract: To study the network equilibrium problem of dual-channel supply chains under the background of retailers' risk aversion, a dual-channel supply chain network equilibrium model including multiple competitive suppliers, manufacturers, retailers, and demand markets was established. The Mean-CVaR method was employed to quantify retailers' risk aversion characteristics, and variational inequalities were utilized to characterize the equilibrium conditions of decision-makers at each tier of the supply chain. The projection contraction algorithm was applied to solve the model and conduct numerical analysis, thereby revealing the impact of retailers' risk aversion behavior on equilibrium outcomes. The simulation results indicate that a higher degree of risk aversion among retailers enhances the overall profit or utility levels of supply chain network members. While retailers tend to prioritize expected profit, other network participants prefer them to focus more on CVaR-based profit. Furthermore, retailers' risk aversion behavior significantly influences demand markets' channel selection preferences. The results provide a theoretical basis for optimizing production and pricing decisions and managing demand uncertainty risks in dual-channel supply chain networks.

Recommended Citation

Wang, Hongchun; Lin, Caifeng; He, Xinyi; and Yin, Haiyue (2025) "Dual-channel Supply Chain Network Equilibrium Model Under Retailers’ Risk Aversion," Journal of System Simulation: Vol. 37: Iss. 12, Article 7.
DOI: 10.16182/j.issn1004731x.joss.25-0690
Available at: https://dc-china-simulation.researchcommons.org/journal/vol37/iss12/7

First Page

3050

Last Page

3059

CLC

F274; TP391

Recommended Citation

Wang Hongchun, Lin Caifeng, He Xinyi, et al. Dual-channel Supply Chain Network Equilibrium Model Under Retailers' Risk Aversion[J]. Journal of System Simulation, 2025, 37(12): 3050-3059.

Corresponding Author

Lin Caifeng

DOI

10.16182/j.issn1004731x.joss.25-0690