Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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A Long-term Capacity Reservation Contract

장기 용량예약 계약

  • Published : 2005.06.01
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Abstract

By committing to a long-term replenishment contract, buyers can purchase a product at a lower price from a supplier who is less pressured to find new customers due to the long-term contract and can charge a discounted price. We develop an analytical model from the buyer's perspective to investigate a capacity reservation contract. We are considering the system with a single supplier and a buyer. The buyer can purchases any desired amount from a spot market at a higher price in addition to the contracted amount. For such a system, we propose an algorithm to derive the optimal contract terms. The result of computational experiments shows that the algorithm finds the global optimum solution in a resonable amount of time.

Keywords

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