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The quantity flexibility contract and supplier-customer incentives. (English) Zbl 1231.90065
Summary: Consider a supply chain consisting of two independent agents, a supplier (e.g., a manufacturer) and its customer (e.g., a retailer), the latter in turn serving an uncertain market demand. To reconcile manufacturing/procurement time lags with a need for timely response to the market, such supply chains often must commit resources to production quantities based on forecasted rather than realized demand.
90B05Inventory, storage, reservoirs
91B42Consumer behavior, demand theory