Quantity flexibility contracts under Bayesian updating

@article{Wu2005QuantityFC,
  title={Quantity flexibility contracts under Bayesian updating},
  author={Jianghua Wu},
  journal={Computers & OR},
  year={2005},
  volume={32},
  pages={1267-1288}
}
In this paper, we consider a decentralized supply chain consisting of two independent players—a manufacturer and a retailer. Under a quantity %exibility contract, the retailer 4rst proposes an initial forecast as the production reference to the manufacturer. Then she uses Bayesian procedure to update demand information, and makes ultimate purchase commitment, which is constrained by the negotiated %exibility and the manufacturer’s production. We model the incentives of both parties and… CONTINUE READING
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