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- W4239315021 abstract "Abstract In this article, we discuss supply contracts. We consider environments in which some type of uncertainty plays an important role. In general, the main objective of supply contracts is to coordinate the supply chain and to (i) ensure that buyers are able to meet their customers' uncertain and changing demand, (ii) provide mechanisms so that suppliers (manufacturers) and buyer share system's risks and costs (more specifically, ensure that suppliers do not assume the entire risk of buffering raw materials and finished goods to meet the final demand for goods), and (iii) provide incentives for suppliers (manufacturers) to build enough capacity. We discuss several different supply contracts. All contracts balance between the flexibility of the buyer adapting to changing market conditions and the stability of the production environment. These contracts differ in their assumptions and complexities. The main differences between these supply contracts are that some are single‐period contracts; the Buy Back contract is a good example of the above. Others are multiperiod contracts and they capture the dynamics of a long horizon. The Periodical Commitments and Flexibility contract is a good example of the multiperiod models. The different contracts consider different mechanism to balance flexibility and stability: Fixed delivery contracts ensure that the sellers deliver a fixed quantity every period, while the option contracts use options to achieve the same objective. The Periodical Commitments and Flexibility contract provides buyers with limited flexibility to change previously made commitments." @default.
- W4239315021 created "2022-05-12" @default.
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- W4239315021 date "2011-01-01" @default.
- W4239315021 modified "2023-10-10" @default.
- W4239315021 title "Procurement Contracts" @default.
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- W4239315021 doi "https://doi.org/10.1002/9780470400531.eorms1007" @default.
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