Optimal Strategies of Supply Chain with Uncertain Electronic Market Price

Abstract

This paper develops some models to explore the strategies of the supply chain agents when there exists an electronic market. Besides the demand uncertainty, the electronic market price uncertainty is also taken into consideration. The expected profit of the retailer and the supplier are derived. We prove the concavity of the expected profit and obtain the corresponding optimal strategies. In addition, we identify the conditions under which the supplier would join the e-market. It is found that the decisions of the supply chain agents depend on the revenue structure of the e-market owner.