Risk analysis of commitment-option contracts with forecast updates
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 415-431 |
| Journal / Publication | IIE Transactions (Institute of Industrial Engineers) |
| Volume | 43 |
| Issue number | 6 |
| Publication status | Published - Jun 2011 |
| Externally published | Yes |
Link(s)
Abstract
The standard treatment of supply chain models largely focuses on the optimization of the expected value of a given cost or profit measure. Due to highly uncertain supply and demand conditions, the use of the expected objective measure may not be justified. This article studies a class of commitment-option supply contracts in a mean-variance framework. With structure properties established it is shown that a mean-variance trade-off analysis with advanced reservation can be carried out. Moreover, it is indicated how the corresponding contract decisions differ from decisions for optimizing an expected objective value. © 2011 "IIE".
Research Area(s)
- commitment-option contract, forecast updates, Mean-variance, stochastic order
Citation Format(s)
Risk analysis of commitment-option contracts with forecast updates. / Buzacott, John; Yan, Houmin; Zhang, Hanqin.
In: IIE Transactions (Institute of Industrial Engineers), Vol. 43, No. 6, 06.2011, p. 415-431.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
