Dirección de Producción, Tecnología y Operaciones
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Nota Técnica / Dirección de Producción, Tecnología y Operaciones
Note on Optimal Ordering Strategies and Supply Chain Coordination
Raz G.
Darden University of Virginia (USA)
Sigla: DARDENN-OM1371-E
Resumen:
This note examines a firm's decision about its optimal order quantity. It describes the famous newsvendor problem, which is the basis for inventory theory and how it can be used to find the optimal quantity to order when the firm is facing uncertain demand. The second part of the note uses the newsvendor framework to discuss the importance of supply chain coordination where all the entities in the supply chain operate with the same goal in mind. The note examines how supply chain contracts, such as revenue-sharing and buyback contracts, can be used to coordinate the supply chain and achieve the optimal supply chain profitability. The note can be used to teach the newsvendor model and supply chain contracts in courses focusing on supply chain management or in operations management courses that include a supply chain module.
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