Pricing and Ordering Policies in a Supply Chain with Risk-Averse Retailer and Asymmetric Information

This paper studies the pricing and ordering policy of a two-echelon supply chain with a risk-neutral supplier and a risk-averse retailer, the risk aversion of the retailer is measured by CVaR. The retailer has accurate demand information while the supplier does not. The research shows that the uncertainty of the supplier on the demand will lead to a reduction of the supplier´s expected profit, which also shows the value of information. Moreover, the uncertainty on the demand will lead to a biased forecast of the expected profit for the supplier.