Study on the Coordination System of Supply-Chain with Loss-Averse Retailers Participation

This thesis studies the best decision of Loss-averse retailers with regard to a buy-back contract, the result shows that retailers tend to make a decision that deviates from the best one within the system due to their fear of loss. But the supply-chain coordination under buy-back contract can be made through stimulation to retailers if the reward-punishment contract is introduced. In the end, this thesis proves effects of the reward-punishment contract in supply-chain coordination with numerical examples, and illustrates that the harder retailers try to avoid risks, the more suppliers have to pay for supply-chain coordination.