Supply chain structure and demand risk

@article{Chen2006SupplyCS,
  title={Supply chain structure and demand risk},
  author={Ying-Ju Chen and Sridhar Seshadri},
  journal={Automatica},
  year={2006},
  volume={42},
  pages={1291-1299}
}
Agrawal & Seshadri [1] considered a problem in which a single risk neutral distributor supplies a short-lifecycle, long-leadtime product to several retailers that are identical except in their attitudes towards risk. They proved that the distributor should not offer the same terms to every retailer but instead offer less risky (from the demand risk perspective) contracts to more risk averse retailers. They did not prove the optimality of their menu. In this paper we reconstruct their results… CONTINUE READING