Cross-Border E-Commerce Supply Chain Decision-Making Considering Out-of-Stock Aversion Risk and Waste Aversion Risk

Abstract

With the increase of black swan incidents, cross-border e-commerce supply chains are facing more risks. Out-of-stock aversion and waste aversion are examined as the risk preferences of cross-border e-commerce platforms and overseas warehouses based on prospect theory. A cross-border e-commerce supply chain decision making model with four different risk preference combinations is constructed under the Stackelberg game decision making model. The relationships between the risk preference coefficient and the ordering strategy for the overseas warehouse and the pricing strategy for the cross-border e-commerce platform are analyzed through the numerical analysis of an arithmetic case. The results show that: 1) the cross-border e-commerce platform at the leading position has a more prominent impact on the performance of the cross-border e-commerce supply chain; 2) when the overseas warehouse is out-of-stock averse and the cross-border e-commerce platform is waste averse, both the order quantity and pricing increase with the increase of the risk preference coefficient; when the overseas warehouse is waste averse and the cross-border e-commerce platform is out-of-stock averse, both the order quantity and pricing decrease with the increase of the risk preference coefficient; 3) when the overseas warehouse and the cross-border e-commerce platform have the same risk preference, the overseas warehouse adopts a more aggressive ordering strategy when they are more out-of-stock averse, and adopts a more conservative ordering strategy when they are more waste averse.INDEX TERMS Cross-border e-commerce supply chain, risk preference, stackelberg game, out-of-stock aversion, waste aversion.

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