The Price Decision for Large-Scale Project’s Procurement with Stage-Demand Uncertainty

Zhi-yu An () and Yu-can Liu
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Zhi-yu An: Nanjing University of Science and Technology
Yu-can Liu: Nanjing University of Science and Technology

A chapter in Proceedings of 20th International Conference on Industrial Engineering and Engineering Management, 2013, pp 1085-1094 from Springer

Abstract: Abstract A better management of stage demand uncertainty in large-scale projects can significantly contribute to project performance. The project’s procurement dominate the relationships with the material suppliers. To deal with the stage-demand uncertainty, they can provide commitment price to reserve the supplier’s capacity combining the overbooking compensation and penalty for out of stock. This paper discussed the difference between the situation of risk neutral and loss aversion. And for the demand disturbance, this paper also analyzed the optimal adjustment strategy when the demand distribution was changed.

Keywords: Commitment price; Demand uncertainty; Large-scale project; Loss aversion; Project procurement (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-40063-6_106

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DOI: 10.1007/978-3-642-40063-6_106

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