Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/18059
Title: Transfer of newsvendor inventory and supply risks to sub-industry and the public by financial instruments
Authors: Hung, YH 
Li, LYO 
Cheng, TCE 
Issue Date: 2013
Source: International journal of production economics, 2013, v. 143, no. 2, p. 567-573
Abstract: We consider a two-stage newsvendor model of a sub-industry in which suppliers have short lead-time capacity to produce goods for retailers that are selling non-identical products. We argue that the inventory and supply risks of the newsvendors due to demand uncertainty can be pooled and shared among different supply chains by treating reserved capacity as commodities and trading them as futures and options on futures to hedge the risks. The risks will be further shared with and transferred to the public if speculators are allowed to play the game. We show that this new mechanism of combining operational and financial risk hedging strategies offers industries a new way to more efficiently meet demand and improve profit.
Keywords: Capacity allocation game
Options on super capacity futures
Risk pooling
Super capacity futures
Publisher: Elsevier
Journal: International journal of production economics 
ISSN: 0925-5273
DOI: 10.1016/j.ijpe.2011.10.019
Description: This Special Issue contains papers presented at the Sixteenth International Symposium on Inventories, held in Budapest, Hungary in August 2010.
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

6
Last Week
1
Last month
0
Citations as of Aug 29, 2020

WEB OF SCIENCETM
Citations

6
Last Week
0
Last month
Citations as of Sep 18, 2020

Page view(s)

170
Last Week
0
Last month
Citations as of Sep 22, 2020

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.