Flexible and risk-sharing supply contracts under price uncertainty

Chung Lun Li; Panos Kouvelis

doi:10.1287/mnsc.45.10.1378

Flexible and risk-sharing supply contracts under price uncertainty

Chung Lun Li, Panos Kouvelis

Research output: Journal article publication › Journal article › Academic research › peer-review

169 Citations (Scopus)

Abstract

This study examines supply contracts for deterministic demand but in an environment of uncertain prices. Valuation methodologies are developed for different types of supply contracts. Optimal purchasing strategies for both time-flexible and time-inflexible contracts with risk-sharing features are discussed. The discussion illustrates how time flexibility, quantity flexibility, supplier selection, and risk sharing, when carefully exercised can effectively reduce the sourcing cost in environments of price uncertainty.

Original language	English
Pages (from-to)	1378-1398
Number of pages	21
Journal	Management Science
Volume	45
Issue number	10
DOIs	https://doi.org/10.1287/mnsc.45.10.1378
Publication status	Published - 1 Jan 1999
Externally published	Yes

ASJC Scopus subject areas

Strategy and Management
Management Science and Operations Research

More information

10.1287/mnsc.45.10.1378

Cite this

@article{65141e123fb644bbb09c9ff7c9c9b1eb,

title = "Flexible and risk-sharing supply contracts under price uncertainty",

abstract = "This study examines supply contracts for deterministic demand but in an environment of uncertain prices. Valuation methodologies are developed for different types of supply contracts. Optimal purchasing strategies for both time-flexible and time-inflexible contracts with risk-sharing features are discussed. The discussion illustrates how time flexibility, quantity flexibility, supplier selection, and risk sharing, when carefully exercised can effectively reduce the sourcing cost in environments of price uncertainty.",

author = "Li, {Chung Lun} and Panos Kouvelis",

year = "1999",

month = jan,

day = "1",

doi = "10.1287/mnsc.45.10.1378",

language = "English",

volume = "45",

pages = "1378--1398",

journal = "Management Science",

issn = "0025-1909",

publisher = "INFORMS Institute for Operations Research and the Management Sciences",

number = "10",

}

TY - JOUR

T1 - Flexible and risk-sharing supply contracts under price uncertainty

AU - Li, Chung Lun

AU - Kouvelis, Panos

PY - 1999/1/1

Y1 - 1999/1/1

N2 - This study examines supply contracts for deterministic demand but in an environment of uncertain prices. Valuation methodologies are developed for different types of supply contracts. Optimal purchasing strategies for both time-flexible and time-inflexible contracts with risk-sharing features are discussed. The discussion illustrates how time flexibility, quantity flexibility, supplier selection, and risk sharing, when carefully exercised can effectively reduce the sourcing cost in environments of price uncertainty.

AB - This study examines supply contracts for deterministic demand but in an environment of uncertain prices. Valuation methodologies are developed for different types of supply contracts. Optimal purchasing strategies for both time-flexible and time-inflexible contracts with risk-sharing features are discussed. The discussion illustrates how time flexibility, quantity flexibility, supplier selection, and risk sharing, when carefully exercised can effectively reduce the sourcing cost in environments of price uncertainty.

UR - http://www.scopus.com/inward/record.url?scp=0033207921&partnerID=8YFLogxK

U2 - 10.1287/mnsc.45.10.1378

DO - 10.1287/mnsc.45.10.1378

M3 - Journal article

VL - 45

SP - 1378

EP - 1398

JO - Management Science

JF - Management Science

SN - 0025-1909

IS - 10

ER -

Flexible and risk-sharing supply contracts under price uncertainty

Abstract

ASJC Scopus subject areas

More information

Other files and links

Cite this