Title :
Financial hedging in a three-echelon global supply chain in presence of spot market
Author :
Mu, Yinping ; Huang, Li ; Wang, Haibin
Author_Institution :
Sch. of Manage. & Econ., Univ. of Electron. Sci. & Technol. of China, Chengdu, China
Abstract :
This paper systematically analyzes the exchange rate risk hedging problem. We build a three stages dynamic game model for a global supply chain consisting of a supplier, a manufacturer and a retailer with mean-variance preferences over their profit. We derive the unique equilibrium supply contract and wholesale contract, and develop the closed-form expressions on products prices, order quantities, and the forward exchange rate levels for each supply chain member in the presence of spot market.
Keywords :
contracts; exchange rates; financial management; game theory; pricing; supply chain management; closed-form expression; equilibrium supply contract; exchange rate risk hedging problem; financial hedging; forward exchange rate level; manufacturer; mean-variance preference; order quantity; products price; retailer; spot market; supplier; three stage dynamic game model; three-echelon global supply chain; wholesale contract; Contracts; Exchange rates; Face; Materials; Supply chains; Uncertainty;
Conference_Titel :
Service Systems and Service Management (ICSSSM), 2012 9th International Conference on
Conference_Location :
Shanghai
Print_ISBN :
978-1-4577-2024-6
DOI :
10.1109/ICSSSM.2012.6252221
