Research on two-stage supply chain revenue sharing contract with loss-aversion under disruption

This paper studies whether the revenue sharing contract can coordinate a two-stage supply chain consisting of a risk-neutral supplier and a loss-aversion retailer when it suffers from disruptions. The loss-averse model is used to analyze the loss-aversion level of the retailer while taking the preference of a loss-aversion retailer´s decision-making into consideration. The decentralized and the centralized profit of the supply chain is discussed separately, then the result shows that the revenue sharing contract can coordinate such a supply chain, and the range of the contract parameter value will be increased by the level of the loss-aversion of the retailer. Finally, the conclusions are validated by a numerical example study; it also indicates that the utility of retailer and the profit of the supplier vary inversely after the demand disruption.