Coordinated ordering decisions for short life cycle products with uncertainty in delivery time and demand

We consider a two-party system, in which the buyer orders a product from the supplier, whose delivery time is uncertain. The buyer is faced with random demand over a selling period of fixed length. The supplier aims to deliver the product at the start of the selling period, and if the delivery is late the buyer is compensated by the supplier. Our focus is on assessing the value and limitations of supplier–buyer coordination in coping with the uncertainty both in demand and delivery time.