A Bidirectional Option Flexibility Contract for Emergency under Stochastic Price

doi:10.3969/j.issn.1007-7375.2019.01.008

Abstract

Abstract: Aiming to deal with the risk of wholesale price fluctuation with options and the risk caused by the random fluctuation of market price and market demand with quantity flexibility contracts, the internal law of the coordination supply chain with bidirectional option quantity flexibility contracts is explored. The bidirectional option contract and quantity flexibility contract are integrated, and the supply chain with random fluctuation of wholesale price, market price and market demand is coordinated to find the optimal supply chain decision. The simulation example is given. The results show that the bidirectional option flexibility contract is more effective than the base quantity flexibility contract when the wholesale price fluctuates. The bidirectional option flexibility contract can coordinate supply chain with both wholesale price and market price.

Key words: stochastic price, bidirectional option, quantity flexibility contract, supply chain coordination

CLC Number:

TP273

LU Shengwei. A Bidirectional Option Flexibility Contract for Emergency under Stochastic Price[J]. Industrial Engineering Journal , 2019, 22(1): 61-68.

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