A Study on Transactional Strategies in the Supply Chain Based on Bilateral Optional Forward Contracts

Author

Tian Jun ; Chen Da-peng ; Li Xiao-Li

Author_Institution

Zhengzhou Inst. of Aeronaut. Ind. Manage., Zhengzhou

fYear

2008

fDate

12-14 Oct. 2008

Firstpage

1

Lastpage

5

Abstract

The fluctuations of market price bring risks to supply chain enterprises, which sign some optional forward contracts in order to reduce these risks. As an effective instrument for risk management, optional forward contract has the character of flexibility and variety. This paper aims to formulate the price of the contract using the option pricing theory and obtain an optimal proportion of forward contracts and the influence factors through the risk evasion model and on the basis of the utility maximization principle.

Keywords

contracts; pricing; risk management; supply chains; bilateral optional forward contracts; market price; risk management; supply chain enterprises; transactional strategies; utility maximization principle; Aerospace industry; Fluctuations; Forward contracts; Instruments; Pricing; Probability distribution; Risk management; Supply chain management; Supply chains; Waste materials;

fLanguage

English

Publisher

ieee

Conference_Titel

Wireless Communications, Networking and Mobile Computing, 2008. WiCOM '08. 4th International Conference on

Conference_Location

Dalian

Print_ISBN

978-1-4244-2107-7

Electronic_ISBN

978-1-4244-2108-4

Type

conf

DOI

10.1109/WiCom.2008.1452

Filename

4679360