A purchaser's optimal procurement strategy under emergencies

• DOI: 10.1080/03081079.2024.2340104
• Publication Date: 2024-04-15T10:56:07Z
• Authors: Shuming Sang; Xinsheng Xu; Carman K. M. Lee
• Keywords: Economic shortage; Dominance (genetics)

This paper investigates a purchaser's optimal procurement strategy under emergencies. The occurrence of emergencies often leads to sharp fluctuations in prices and weakens supply stability, which increases risks for purchasers. In this study, we use the option contract actively respond market reduce caused by If there is insufficient inventory due emergencies, part or all shortages can be met an emergency replenishment. Then, conduct in-depth research on purchasers results show that, higher replenishment rate smaller purchase quantity if shortage cost not considered, since save shortages. both over-purchasing under-purchasing options lead corresponding losses, then trend purchasing decision decided dominance two types losses. Finally, summarize study give managerial insights into strategies