• About
  • Policies
  • What is open access
  • Library
  • Contact
Advanced search
      View Item 
      •   BUIR Home
      • Scholarly Publications
      • Faculty of Business Administration
      • Department of Management
      • View Item
      •   BUIR Home
      • Scholarly Publications
      • Faculty of Business Administration
      • Department of Management
      • View Item
      JavaScript is disabled for your browser. Some features of this site may not work without it.

      Sourcing decisions with capacity reservation contracts

      Thumbnail
      View / Download
      149.8 Kb
      Author(s)
      Serel, D. A.
      Dada, M.
      Moskowitz, H.
      Date
      2001
      Source Title
      European Journal of Operational Research
      Print ISSN
      0377-2217
      Electronic ISSN
      1872-6860
      Publisher
      Elsevier
      Volume
      131
      Issue
      3
      Pages
      635 - 648
      Language
      English
      Type
      Article
      Item Usage Stats
      235
      views
      345
      downloads
      Abstract
      By committing to long-term supply contracts, buyers seek to lower their purchasing costs, and have products delivered without interruption. When a long-term contract is available, suppliers are less pressured to find new customers, and can afford to charge a price lower than the prevailing spot market price. We examine sourcing decisions of a firm in the presence of a capacity reservation contract that this firm makes with its long-term supplier in addition to the spot market alternative. This contract entails delivery of any desired portion of a reserved fixed capacity in exchange for a guaranteed payment by the buyer. We investigate rational actions of the two parties under two different types of periodic review inventory control policies used by the buyer: the two-number policy, and the base stock policy. When typical demand probability distributions are considered, inclusion of the spot market source in the buyer's procurement plan significantly reduces the capacity commitments from the long-term supplier.
      Keywords
      Capacity reservation
      Inventory
      Long-term contracts
      Supply chain management
      Contracts
      Decision making
      Inventory control
      Capacity reservation contracts
      Outsourcing
      Permalink
      http://hdl.handle.net/11693/24850
      Published Version (Please cite this version)
      http://dx.doi.org/10.1016/S0377-2217(00)00106-5
      Collections
      • Department of Management 639
      Show full item record

      Browse

      All of BUIRCommunities & CollectionsTitlesAuthorsAdvisorsBy Issue DateKeywordsTypeDepartmentsCoursesThis CollectionTitlesAuthorsAdvisorsBy Issue DateKeywordsTypeDepartmentsCourses

      My Account

      Login

      Statistics

      View Usage StatisticsView Google Analytics Statistics

      Bilkent University

      If you have trouble accessing this page and need to request an alternate format, contact the site administrator. Phone: (312) 290 2976
      © Bilkent University - Library IT

      Contact Us | Send Feedback | Off-Campus Access | Admin | Privacy