1 AIT Asian Institute of Technology

Option contract in one supplier - two retailers supply chain with limited supply capacity

AuthorPyae Phyo Lwin
NoteA thesis submitted in partial fulfillment of the requirements for the degree of master of engineering in industrial and manufacturing engineering
PublisherAsian Institute of Technology
AbstractThis research examines supply chain coordination in a single-supplier two-retailer supply chain with the bidirectional option contract. By utilizing the traditional wholesale price contract, the profit of supplier is not high normally and the contract is not much attractive for all firms. Under the bidirectional option contract, the supplier announces the fair and attractive option prices, then, the retailers place the initial orders and purchase option quantities. When the demand information is realized, the two retailers adjust the initial orders by exercising call or put options. To consider coordination and profit sharing, the demand in each period is assumed to be under uniform distribution and the mathematical models are developed. This research finds that in a single-supplier two-retailer supply chain, the bidirectional option contract can significantly coordinate supply chain and achieve win-win situation.
Year2016
TypeThesis
SchoolSchool of Engineering and Technology (SET)
DepartmentDepartment of Industrial Systems Engineering (DISE)
Academic Program/FoSIndustrial Systems Engineering (ISE)
Chairperson(s)Huynh Trung Luong;
Examination Committee(s)Bohez, Erik L.J.;Pisut Koomsap;
Scholarship Donor(s)Ministry of Foreign Affairs;Norway;


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