Abstract: Based on the newsboy model,three types of order timing are analyzed in a supply chain which consists of a risk-averse manufacturer and a risk-averse retailer. The three types of order timing are advance order, delayed order and flexible order. The influence of risk aversion on the supply chain is also examined. Different from literatures about risk neutral assumption,the results show that due to risk aversion,the retailer tends to minimize his order quantity under the mode of advance order, and the manufacturer tends to minimize her production quantity under the mode of delayed order. Further analysis shows that the retailer may cut his order quantity by at least half and the manufacturer’s profit may be reduced by at least half under certain conditions. So a Franchisee fee contract is employed to coordinate. It is suggested that enhancing business confidence and eliminating adverse influence play a very important role during economic depression.

Key words: order timing, order postponement, risk aversion, supply chain coordination