Demand uncertainty can lead to excess inventory holdings, capacity creation, emergency deliveries, and stock-outs. The costs of demand uncertainty may be directly borne by upstream suppliers, but can propagate downstream in the form of higher prices. To address these problems, we investigate a practical application of a fixed order commitment contract (FOCC) in which a manufacturer commits to a minimum fixed order quantity each period and receives a per unit price discount from the supplier for the commitment. We model a FOCC as a Stackelberg game in which the supplier offers a price discount anticipating the manufacturer’s response, and the manufacturer subsequently decides on the optimal commitment quantity. We show that a FOCC can smooth the orders received by the supplier, mitigating the negative consequences of demand uncertainty for the supplier, the manufacturer, and the supply chain. We extend the current literature by solving for an endogenous price discount instead of treating it as an exogenous value, and validate our model insights with our research partner, a large international materials handling equipment manufacturer. Using data on 863 parts, we evaluate the relationships between the model parameters, contract parameters, and the contract effectiveness, and show the conditions under which the FOCC generates greater cost savings for both the manufacturer and supplier. Our results help operations managers better understand how to obtain the optimal contract parameters for a FOCC and the circumstances under which such a contract is most beneficial for the company and its supply chain.

中文翻译：

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在有能力的供应链中应用固定订单承诺合同


需求不确定性可能导致库存过多、产能增加、紧急交货和缺货。需求不确定性的成本可能由上游供应商直接承担，但可能以价格上涨的形式向下游传播。为了解决这些问题，我们研究了固定订单承诺合同（FOCC）的实际应用，其中制造商承诺每个周期的最小固定订单数量，并从供应商处获得承诺的单位价格折扣。我们将 FOCC 建模为 Stackelberg 博弈，其中供应商根据预期制造商的反应提供价格折扣，制造商随后决定最佳承诺数量。我们证明，FOCC 可以平滑供应商收到的订单，减轻需求不确定性对供应商、制造商和供应链的负面影响。我们通过解决内生价格折扣而不是将其视为外生价值来扩展现有文献，并与我们的研究合作伙伴（一家大型国际物料搬运设备制造商）验证我们的模型见解。使用 863 个零件的数据，我们评估了模型参数、合同参数和合同有效性之间的关系，并展示了 FOCC 为制造商和供应商带来更大成本节省的条件。我们的研究结果帮助运营经理更好地了解如何获得 FOCC 的最佳合同参数，以及在什么情况下此类合同对公司及其供应链最有利。