Investigation of rolling horizon flexibility contracts in a supply chain under highly variable stochastic demand

A discrete-event simulation model of a supply chain has been developed to evaluate operational performance of sharing uncertain information on upcoming demand between an original equipment manufacturer (OEM) and a contract manufacturer under a formal rolling horizon flexibility (RHF) contract in a four-node supply chain. There are two types of RHF contracts evaluated, i.e, RHF contract with constant flexibility and decreasing flexibility bounds. The demand is externalized (i.e. the OEM receives the demand), stochastic and generated according to a gamma distribution. This paper reports on the analysis of RHF contracts.