Research Article
Managing Distrust-Induced Risk with Deposit in Supply Chain Contract Decisions
| | Supplier | Retailer |
| Public information | | Supplier’s wholesale price | | Retailer’s retail price | | Product cost of each product
| | Reputation induced being trust | | Capacity setup cost of each product
| | Market fluctuation |
| Private information | | Forecasted average demand by supplier → | | Evaluation about | | | | Forecasted average demand from retailer’s perspective |
| Decision variable | | Capacity | | Reported average demand | | Deposit index | | |
| Evaluated information | | The demand gap evaluated by supplier | | The demand gap evaluated by retailer | | Trust on retailer reported average demand | | Retailer evaluated being trust level |
| Objective | | Supplier’s expected profit in the decentralize supply chain | | Retailer’s expected profit in the decentralize supply chain | | Supplier’s expected profit in the supply chain with the risk management | | Retailer’s expected profit in the supply chain with the risk management |
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