Coordinating an emergency medical material supply chain with CVaR under the pandemic considering corporate social responsibility

Abstract

In an emergency medical material supply chain, the coordination of the manufacturer’s risk-averse behaviour and the retailer’s risk-averse behaviour is a challenging problem during the pandemic and uncertainties of market remand. This paper constructs an emergency medical supply chain decision model in the context of corporate social responsibility (CSR), government subsidy, and risk aversion during the pandemic situation. Then, the paper utilizes CVaR to carry out a risk assessment and analyzes the optimal decision under different scenarios. It shows that when the risk aversion coefficient and the mutual cost-sharing ratio of the manufacturer and the retailer meet specific constraints, the cost-sharing-buyback joint contract can make the emergency medical material supply chain reach a coordinated state. Through sensitive analysis of some parameters, we gain the effect of the risk aversion coefficient and demand variation coefficient on the optimal order quantity and CVaR values of the emergency medical supply chain and members. Furthermore, a comparative analysis of calculation examples under two situations of no government subsidy and government subsidy is conducted. Numerical results indicate that government subsidy can reduce the burden on supply chain members and incentivize members to invest in corporate social responsibility. Finally, numerical analyses are carried out to confirm the validity and practicability of the model. The work proves that the risk aversion coefficient and the variation coefficient of demand can change the optimal order quantity, CSR effort level, and CVaR values. In addition, members’ risk aversion coefficients significantly influence members’ decision-making behaviours.