RETAILER DOMINATED SUPPLY CHAIN COORDINATION WITH SUPPLIER'S FAIRNESS PREFERENCE

This paper studies the optimal decisions and profit allocations in a retailer-dominated supply chain when considering the supplier's fairness preference. Under deterministic retail-market demand we analytically derive the retailer's optimal decision, supplier's optimal wholesale price as well as their optimal profits. We find that the conclusions under deterministic market demand are substantially different. That is, in retailer-leading supply chain structure, price-only equivalent contract could not achieve the supply chain coordination, whatever taking the supplier's fairness preference into consideration or not. Under stochastic demand, we have numerical analyzed that the retailer dominated supply chain still can not coordinate the supply chain when integrating the fairness of supplier. Furthermore, the fairness preference has no effect on the retail price.