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Service capacity procurement of logistics service supply chain with demand updating and loss-averse preference

Service capacity procurement of logistics service supply chain with demand updating and loss-averse preference

Liu, Weihua, Wang, Meili, Zhu, Donglei and Zhou, Li ORCID: 0000-0001-7132-5935 (2018) Service capacity procurement of logistics service supply chain with demand updating and loss-averse preference. Applied Mathematical Modelling, 66. pp. 486-507. ISSN 0307-904X (doi:https://doi.org/10.1016/j.apm.2018.09.020)

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Abstract

This research aims to identify the impacts of loss-averse preference on the service capacity procurement decisions with demand updating in a logistics service supply chain, which consists of one logistics service integrator and one functional logistics service provider. It starts from a basic two-stage Stackelberg game model, then, extends to three scenarios where either the integrator or the provider or neither of them has loss-averse preference. The impact of loss-averse preference on the decisions of supply chain members is discussed by comparing the four models. Our results reveal, first, the loss-averse preferences do not always affect the decisions of supply chain members. If certain conditions are satisfied, the logistics service integrator can benefit from its loss-averse preference. Second, the increased service level can affect the logistics service integrator’s procurement strategy and the functional logistics service provider’s pricing strategy. This effect is only related to the loss-averse preference of the functional logistics service provider. Last, under certain conditions, the total service capacity decreases with the increased service level, regardless of whether or not the supply chain members have loss-averse preferences.

Item Type: Article
Additional Information: SJR Q1 in "Modeling and Simulation"
Uncontrolled Keywords: demand updating; loss-averse preference; procurement; service capacity; logistics service supply chain
Subjects: H Social Sciences > HB Economic Theory
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Networks and Urban Systems Centre (NUSC) > Connected Cities Research Group
Faculty of Business > Department of Systems Management & Strategy
Last Modified: 30 Sep 2019 01:38
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/21882

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