Market price uncertainty, risk aversion and procurement: Combining contracts and open market sourcing alternatives
International Journal of Production Economics, pp. 34-51, 2017.
ContractsOpen market sourcingStochastic price processRisk aversionDisutility minimizationMore(1+)
We evaluate the implications of concurrent utilization of “contracts” and “open market” arrangements by a risk averse buyer in continuous procuring of a standardized product of known demand over a specified time period. The buyer being risk averse is concerned about the magnitude and uncertainty of expenses. The contract price is determin...More
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