Research on ordering and pricing decision of risk-averse manufacturer under exchange rate uncertainty

Based on the global supply chain, which includes two suppliers (a foreign supplier and a local supplier) and one manufacturer (which is risk averse), and considering the exchange rate risk, this paper studies the optimal decision problem of manufacturer´s ordering and pricing. Through constructing the optimal decision model, the optimal decision strategy was given. The results show that a higher exchange rate risk or a higher risk-averse degree will decrease the optimal order quantity from the foreign supplier; and a higher exchange rate risk, or a higher risk-averse degree will increase the optimal order quantity from the local supplier. The manufacturer´s expected profit increases in the risk-averse degree and the exchange rate risk.