Optimal Ordering Policy for Supply Option Contract with Spot Market

Joint Authors

Hou, Xinru
Chen, Haibin
Xu, Xinsheng

Source

Mathematical Problems in Engineering

Issue

Vol. 2020, Issue 2020 (31 Dec. 2020), pp.1-11, 11 p.

Publisher

Hindawi Publishing Corporation

Publication Date

2020-12-09

Country of Publication

Egypt

No. of Pages

11

Main Subjects

Civil Engineering

Abstract EN

This paper considers the procurement mechanism with two supply channels, namely, an option contract purchase and a spot market.

For the mechanism, under the stochastic demand and the stochastic spot price, we consider the portfolio procurement with the spot trading liquidity and the option speculation respectively.

To maximize the buyer’s profit, we establish two optimal portfolio procurement strategy models for those two scenarios.

Based on the buyer’s cost-benefit analysis, we present a solution method to each model and provide an optimal ordering policy to the buyer.

By the obtained results, we analyze the role of the spot trading liquidity and option speculation in a buyer’s expected profit.

Some numerical experiments are presented to show the validity of the formulated models.

American Psychological Association (APA)

Hou, Xinru& Xu, Xinsheng& Chen, Haibin. 2020. Optimal Ordering Policy for Supply Option Contract with Spot Market. Mathematical Problems in Engineering،Vol. 2020, no. 2020, pp.1-11.
https://search.emarefa.net/detail/BIM-1197116

Modern Language Association (MLA)

Xu, Xinsheng…[et al.]. Optimal Ordering Policy for Supply Option Contract with Spot Market. Mathematical Problems in Engineering No. 2020 (2020), pp.1-11.
https://search.emarefa.net/detail/BIM-1197116

American Medical Association (AMA)

Hou, Xinru& Xu, Xinsheng& Chen, Haibin. Optimal Ordering Policy for Supply Option Contract with Spot Market. Mathematical Problems in Engineering. 2020. Vol. 2020, no. 2020, pp.1-11.
https://search.emarefa.net/detail/BIM-1197116

Data Type

Journal Articles

Language

English

Notes

Includes bibliographical references

Record ID

BIM-1197116