A committed delivery strategy with fixed frequency and quantity

Douglas J. Thomas, Steven T. Hackman

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

We analyze a supply chain environment in which a distributor facing price-sensitive demand has the opportunity to contractually commit to a delivery quantity at regular intervals over a finite horizon in exchange for a per-unit cost reduction for units acquired via committed delivery. Supplemental orders needed to meet demand are purchased at an additional unit cost. For normally distributed demand, we use a simulation-based approximation to develop models yielding closed-form solutions for the optimal order quantity and resell price for the distributor. Inventory, ordering and pricing implications for this "committed delivery strategy" are investigated.

Original languageEnglish (US)
Pages (from-to)363-373
Number of pages11
JournalEuropean Journal of Operational Research
Volume148
Issue number2
DOIs
StatePublished - Jul 16 2003

Fingerprint

Unit
demand
Cost reduction
Supply chains
Costs
cost reduction
Finite Horizon
Closed-form Solution
Supply Chain
Pricing
pricing
supply
simulation
Interval
Approximation
costs
Strategy
Demand
Simulation
Distributor

All Science Journal Classification (ASJC) codes

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

Cite this

Thomas, Douglas J. ; Hackman, Steven T. / A committed delivery strategy with fixed frequency and quantity. In: European Journal of Operational Research. 2003 ; Vol. 148, No. 2. pp. 363-373.
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A committed delivery strategy with fixed frequency and quantity. / Thomas, Douglas J.; Hackman, Steven T.

In: European Journal of Operational Research, Vol. 148, No. 2, 16.07.2003, p. 363-373.

Research output: Contribution to journalArticle

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