| Article ID: | iaor2009294 |
| Country: | United States |
| Volume: | 35 |
| Issue: | 4 |
| Start Page Number: | 691 |
| End Page Number: | 712 |
| Publication Date: | Oct 2005 |
| Journal: | Decision Sciences |
| Authors: | Sethi Suresh P., Yan Houmin, Zhang Hanqin |
| Keywords: | decision theory, forecasting: applications, programming: dynamic, inventory: order policies |
We study single and multiperiod quantity flexibility contracts involving one demand forecast update in each period and a spot market. We obtain the optimal order quantity at the beginning of a period and order quantities on contract and from the spot market at the then prevailing price after the forecast revision and before the demand materialization.