Supply Chain Risk Measurement and Transmission Based on Products Pricing

In order to measure the supply chain risk caused by the fluctuation of retail price, which is considered as a random variable, in this paper, for a two-echelon supply chain with a single supplier and a single retailer with no inventories, we use the variances of profits of supplier and retailer to characterize their risk, respectively. And then we analyze the transmission mode of risk by the difference of variances of profits of retailer and supplier, finding that the transmission mode is affected by the probability density function of price and the type of goods. And for the products with enough large ratio of the maximum market demand and the price-sensitive coefficient, no matter how the retail price fluctuates, the risk is reduced when it spreads up.