A flexible contract strategy in a supply chain with an inflexible production mode

Risk analysis of supply contract with call options for buyers

“…(11) and (12), respectively; and (ii) otherwise, the optimal q 0 ¼0 and Q 0 ¼g + n À(2n(wÀ v b ))/ (r +p À v b ). (Proof: see Wang et al (2006).) Wang et al (2006) have proved that an SCCO can improve the buyer's performance (i.e., increase expected profit) at the beginning of the planning horizon compared with the traditional newsvendor model.…”

“…In such business conditions, we introduce the traditional newsvendor (NV) and supply contract with call options (SCCO) models, and the corresponding optimal policies for the buyer, which are also proposed by Wang et al (2006).…”

“…In most of researches related to flexible supply contracts, for instance Wang et al (2006), Donohue (2000), and BarnesSchuster et al (2002), measuring whether one's performance is improved or not depends on whether the expected profit at the beginning of the whole planning horizon can be increased or not. That is, if a proposed model increases expected profit at the beginning of the whole planning horizon, one can say that the proposed model improves the performance, and vice versa.…”

“…In this paper, we analyze the risks of introducing call options into traditional contract model (i.e., typical newsvendor model), named supply contract with call options (SCCO), which is also proposed by Wang et al (2006). This is a two-stage decision-making model.…”

Research on the Improvement of Supply Chain Management Under Drop-shipping Model

“…Suppliers need retailers to actively carry out product marketing and improve product sales. To a certain extent, the more retailers can result in the higher the sales volume and the profits of the produces [8].…”