A committed delivery strategy with fixed frequency and quantity

Douglas J. Thomas, Steven T. Hackman

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

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

All Science Journal Classification (ASJC) codes

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

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