Article ID Journal Published Year Pages File Type
1023835 Transportation Research Part E: Logistics and Transportation Review 2010 15 Pages PDF
Abstract

This paper studies a buy-back contract between a buyer and a backup supplier when the buyer’s main supplier experiences disruptions. The expected profit functions and the optimal decisions of the contract players are derived through a sequential optimization process. The common properties of the contract as well as the differences under the demand uncertainty and the main supplier’s recurrent supply uncertainty are explored through comparative studies and numerical examples. The study contributes to the literature by providing a better understanding of the impacts of demand and supply uncertainties and by shedding insights on the value of a backup supply.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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