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Discrete Dynamics in Nature and Society
Volume 2013 (2013), Article ID 937141, 11 pages
http://dx.doi.org/10.1155/2013/937141
Research Article

Risk-Averse Suppliers’ Optimal Pricing Strategies in a Two-Stage Supply Chain

1College of Economics and Management, Zhejiang University of Technology, Hangzhou, Zhejiang 310032, China
2Department of Mathematics and Information Science, Binzhou University, Binzhou, Shandong 256603, China

Received 3 April 2013; Revised 21 June 2013; Accepted 27 June 2013

Academic Editor: Tinggui Chen

Copyright © 2013 Rui Shen et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers in this paper focus more on losses as compared to profits, and they care their long-term relationship with their customers. We introduce for the suppliers a loss function, which covers both current loss and future loss. The optimal wholesale price is solved under situations of risk neutral, risk averse, and a combination of minimizing loss and controlling risk, respectively. Besides, some properties of and relations among these optimal wholesale prices are given as well. A numerical example is given to illustrate the performance of the proposed method.