Order postponement in a supply chain in the presence of exponential demand with gamma prior

Order postponement in a supply chain in the presence of exponential demand with gamma prior

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Article ID: iaor20101729
Volume: 38
Issue: 2
Start Page Number: 97
End Page Number: 103
Publication Date: Mar 2010
Journal: Operations Research Letters
Authors:
Keywords: procurement
Abstract:

We show for products featuring an exponential demand with Gamma prior, if the demand forecast improves over time and the manufacturer sets the wholesale price, the expected order size increases when the order is placed later. Both the manufacturer and the retailer gain when the order is placed later.

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