Abstract:Under the condition of fuzzy demand, the supply chain network equilibrium, in which loss-averse retailers’ shortage cost is not involved, is examined. The expected utility model of retailers with the piecewise-linear loss aversion utility function is derived by the credibility measure of the fuzzy event, and its concavity property is revealed. The optimal behaviors of manufactures, retailers and consumers are modeled by the variational inequality, and the network equilibrium model is built. It is proved that manufactures’ pricing mechanisms are equivalent to retailers’ at equilibrium in order to simplify network equilibrium conditions. Finally, a numerical example shows the impact of fuzzy demand and loss-averse coefficients on network equilibrium.