The Ordering Strategy of ES Model and Option Contract

Abstract:

In this paper, we incorporate retailer’s risk attitude by means of ES model into the ordering decision for seasonal product and discuss the optimal ordering decisions of the retailer under the option contract mechanism and the wholesale price contract mechanism. We show that the optimal ordering quantities of spot commodity and option commodity are exist and unique.And further analyze that the effect of retailer’s effected profit, option contract on the optimal ordering decision. Finally, we exam our theories by some numerical examples.

• Periodical: Advanced Materials Research (Volume 1037)
• Pages: 522-525
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.1037.522
• Online since: October 2014
• Authors: Xue Wu Wang*, Jiao Meng, Ping Jiang
• Keywords: ES Model, Option Contract, Order Strategy, Seasonal Goods

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