Unsold versus unbought commitment : minimum total commitment contracts with nonzero setup costs

• Main Authors: Yuan, Quan, Chua, Geoffrey A., Liu, Xing, Chen, Youhua Frank
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2015
• Subjects: DRNTU::Business::Operations management::Production management
• Online Access: https://hdl.handle.net/10356/107487; http://hdl.handle.net/10220/25514
• Institution: Nanyang Technological University

We study a minimum total commitment (MTC) contract embedded in a finite-horizon periodic-review inventory system. Under this contract, the buyer commits to purchase a minimum quantity of a single product from the supplier over the entire planning horizon. We consider nonstationary demand and per-uni...