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 Quantity Flexibility Contract Model for Optimal Purchase Decision

최적 구매량 결정을 위한 QF 계약 모형

  • 김종수 (한양대학교 정보경영공학과) ;
  • 김태영 (한양대학교 산업공학과) ;
  • 강우석 (한양대학교 산업공학과)
  • Published : 2006.06.01
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Abstract

Quantity Flexibility contract coordinates individually motivated supplier and buyer to the systemwide optimal outcome by effectively allocating the costs of market demand uncertainty. The main feature of the contract is to couple the buyer's commitment to purchase no less than a certain percentage below the forecast with the supplier's guarantee to deliver up to a certain percentage above. In this paper we refine the previous models by adding some realistic features including the upper and lower limits of the purchase. We also incorporate purchase and canceling costs in a cost function to reflect the real world contracting process more accurately. To obtain the solution of the model, we derive a condition for extreme points using the Leibniz's rule and construct an algorithm for finding the optimal solution of the model. Several examples illustrating the algorithm show that the approach is valid and efficient.

Keywords

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