Risk pooling under demand and price uncertainty

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buir.contributor.authorErkip, Nesim
buir.contributor.orcidErkip, Nesim|0000-0003-4122-6375
dc.citation.epage129en_US
dc.citation.issueNumber1
dc.citation.spage120
dc.citation.volumeNumber315
dc.contributor.authorGüllü, Refik
dc.contributor.authorErkip, Nesim
dc.date.accessioned2024-03-19T13:43:48Z
dc.date.available2024-03-19T13:43:48Z
dc.date.issued2023-11-22
dc.departmentDepartment of Industrial Engineering
dc.description.abstractThis paper studies purchasing a commodity or a perishable item under stochastically evolving and correlated prices for a distribution system environment. We consider the central purchasing of the commodity under the demand process correlated with the random price and decide on the timing and quantity of allocation to demand locations. As an implementation of the physical pooling concept, we investigate the benefits of pooling price and demand risk when the forward purchase is realized for all demand locations. We also study the benefits of informational pooling concepts by deciding on the allocation timing. Even when the demand locations are independent entities, organizing joint purchasing of a commodity may take advantage of economies of scale with a more reliable and less expensive delivery option. We develop a model to guide the purchasing and allocation of quantities and employ multi-echelon inventory theory methods and stochastic processes commonly used in financial engineering and operations management literature.
dc.description.provenanceMade available in DSpace on 2024-03-19T13:43:48Z (GMT). No. of bitstreams: 1 Risk_pooling_under_demand_and_price_uncertainty.pdf: 688685 bytes, checksum: c8fbdf3eef37a340ce000e530cb64c87 (MD5) Previous issue date: 2023-11-22en
dc.description.tableofcontentsProduction, manufacturing, transportation and logistics
dc.embargo.release2025-11-22
dc.identifier.doi10.1016/j.ejor.2023.11.028
dc.identifier.eissn1872-6860
dc.identifier.issn0377-2217
dc.identifier.urihttps://hdl.handle.net/11693/114990
dc.language.isoen
dc.publisherElsevier BV
dc.relation.isversionofhttps://doi.org/10.1016/j.ejor.2023.11.028
dc.rightsCC BY-NC-ND 4.0 DEED (Attribution-NonCommercial-NoDerivs 4.0 International)
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.source.titleEuropean Journal of Operational Research
dc.subjectCorrelated price and demand processes
dc.subjectDistribution systems
dc.subjectPhysical and informational risk pooling
dc.subjectSupply chain management
dc.subjectTiming of allocation
dc.titleRisk pooling under demand and price uncertainty
dc.typeArticle

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