Title: Two-stage flexible supply contract with payback and information update

 

Author: Ali Cheaitou, Zied Jemai, Yves Dallery, Christian Van Delft

 

Address: Euromed Management, Domaine de Luminy, BP 921, 13288 Marseille Cedex 9, France. ' Laboratoire Genie Industriel, Ecole Centrale Paris, Grande Voie des Vignes, 92295 Chatenay-Malabry Cedex, France. ' Laboratoire Genie Industriel, Ecole Centrale Paris, Grande Voie des Vignes, 92295 Chatenay-Malabry Cedex, France. ' HEC School of Management, Paris (GREGHEC), 1 Rue de la Liberation, 78351 Jouys-en-Josas Cedex, France

 

Journal: European J. of Industrial Engineering, 2010 Vol.4, No.4, pp.471 - 492

 

Abstract: In this paper, we consider a two-stage supply contract model for advanced reservation of capacity, with payback option at the beginning of the selling season. Between the two decision stages, external information is collected that serves to update the demand forecast and permits to adjust the decisions of the first stage by exercising options or by returning some units to the supplier. The demand occurs during a single selling period. At the end of the period, the remaining inventory, if any, is sold at a salvage value. During the selling season, any satisfied demand is charged with a unit selling price and any unsatisfied demand is lost. The objective of the model is to determine the quantities to be ordered before the beginning of the selling season which can be interpreted as the amount of capacity to be reserved, in order to satisfy optimally the demand. [Received 3 October 2008; Revised 30 May 2009; Accepted 1 December 2009]

 

Keywords: supply contracts; forecast updating; stochastic costs; payback; capacity reservations; flexibility; information updates; two-stage contracts; selling season; demand forecasts; decision adjustments; options; unit returns; suppliers; selling periods; inventories; salvage values; satisfied demand; unit selling prices; unsatisfied demand; order quantities; optimal demand; optimisation.

 

DOI: 10.1504/EJIE.2010.035655

10.1504/10.35655

 

 

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