• IE interfaces
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• v.22 no.2
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• pp.165-173
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• 2009

This paper considers a two-component assembly system that makes different types of purchasing contracts by component type and studies the issue of coordinating those contracts. Acquisition of type 1 component is based on the long-term contract. In contrast, type 2 component is intermittently purchased under the sort-term contract. We identify the structural properties of the optimal short-term contract and investigate how the changes in system parameters affect the optimal performance. To provide managerial insights, we compare the short-term and long-term contracts for type 2 component and discuss the conditions that make the short-term contract preferable to the long-term contract. We also present a result which shows that coordinating the contracts of type 1 and type 2 components can be significantly profitable over uncoordinating them.

• Journal of the Korean Operations Research and Management Science Society
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• v.30 no.2
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• pp.105-115
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• 2005

By committing to a long-term replenishment contract, buyers can purchase a product at a lower price from a supplier who is less pressured to find new customers due to the long-term contract and can charge a discounted price. We develop an analytical model from the buyer's perspective to investigate a capacity reservation contract. We are considering the system with a single supplier and a buyer. The buyer can purchases any desired amount from a spot market at a higher price in addition to the contracted amount. For such a system, we propose an algorithm to derive the optimal contract terms. The result of computational experiments shows that the algorithm finds the global optimum solution in a resonable amount of time.

• Journal of Information Technology Services
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• v.15 no.1
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• pp.81-96
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• 2016

This study analyzes how breach fee under long-term contract and/or cap regulation on the breach fee can affect the impacts of "Mobile Device Distribution Improvement Act" on handset bundle price, average revenue per unit (ARPU), and social welfare. We conduct comparative analysis with an economic model of duopoly competition in price when users are under long-term contract and the breach fee can be regulated. The results show that the Act lowers the equilibrium prices, lower than incumbent price without the Act. Price of non-dominant Mobile Network Operator (MNO) can be lower than poaching price without the Act if significant portion of switching cost is breach fee or the market is significantly asymmetric. Under the significant circumstances, the Act can raise ARPU even though it improves social welfare. By contrast, the Act increases consumer surplus without affecting social welfare if breach fee is the only source of user's switching cost and is capped by the regulation, and more symmetric market and the stronger cap leads to higher consumer surplus.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.57
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• pp.3-34
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• 2013

In the international sales contract, long-term contracts often face hardship in fulfilling the original contract terms by relevant parties due to rapid change and uncertainty of political and economic circumstance. In this case, party who faces hardship of fulfillment terminates contract or demands adaptation to contract condition but if opponent doesn't accept this, it proceeds to commercial dispute needing legal interpretation. Generally it is wise to set forth governing law in contract between parties in the case of international contract, for legal stability. One of universal governing law which relevant parties select by agreement to solve economical hardship of fulfillment is PICC. PICC defines the hardship in detail for renegotiation on following hardship of fulfillment unexpected. In the case of failing renegotiation, Court(arbitral tribunal) conducts termination to contract or adaptation to contract condition through arbitration or mediation. In conclusion, when signing international long-term contract, it is desirous to handle dispute effectively by inserting provisions which can deal with economical hardship in contract or defining PICC as governing law in the case of hardship incurred. It is because it is realistic to handle dispute smoothly to the extent that both parties can be satisfied in the case of hardship incurred, though international contract should be fulfilled.

• Journal of Korean Institute of Industrial Engineers
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• v.30 no.3
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• pp.241-249
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• 2004

By committing to a long-term replenishment contract, suppliers can mitigate the pressure to find new customers and afford to charge a discounted price to buyers seeking to lower their purchasing costs. In this paper, we develop an analytical model from buyer's perspective for the contracting process to investigate the buyer-supplier interactions. Based on the developed model, we propose an algorithm to derive optimal strategy for the contract. We consider a system with a single buyer and a supplier in a situation where the buyer's inventory is controlled by (R, S) policy under VMI setting. According to the contract, the supplier should replenish the buyer's inventory up to a fixed level every R times during a specified period. The buyer purchases any deficient amount from a spot market at a higher price. We show by computational experiment that our proposed algorithm finds the global optimum solution.

• The Transactions of the Korean Institute of Electrical Engineers P
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• v.59 no.3
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• pp.263-267
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• 2010

Although electricity market structures may be different from each country, they have a long-term forward market and a short-term spot market in general. Particularly, a bilateral contract transacted at a long-term forward market fixes the electricity price between a genco and a customer so that the customer can avoid risk due to price-spike in the spot market. The genco also can make an efficient risk-hedging strategy through the bilateral contract. In this paper, we propose a new mechanism for deriving the optimal bilateral contract price using game theory. This mechanism can make the customer reveal his true willingness to purchase so that an adequate bilateral contract price is derived.

• Proceedings of the KIEE Conference
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• summer
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• pp.701-703
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• 2004

Although the electricity market structure worldwide may be different in kinds, there generally exists long-term forward market and short-term spot market. Particularly, the bilateral contract in long-term forward market fixes the price between a genco and a customer so that the customer can avoid risks due to price-spike in spot market. The genco also can make an efficient risk-hedge strategy through this bilateral contract. In this paper, we propose a new mechanism for evaluating the optimal bilateral contract price using game theory. This mechanism makes a customer reveal his/her own willingness to purchase electricity so that a fair bilateral contract price can be derived.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2003.11a
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• pp.329-333
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• 2003

This study presents supplier buyer models representing the interactions between supplier and buyer under a long-term replenishment contract in a supply chain system. We established the models according to the economic power of each party. Analysis based on Stackelberg game theoretic approach is tried for each model. We develop methods for each agent to follow to complete a contract for the best interest of each participant.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2003.11a
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• pp.334-337
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• 2003

In this paper we presents a centralized model for a long-term replenishment contract model in the supply chain system. We assume ARIMA demand process for reflecting more realistic demand data and present a solution which minimizes total system cost of the contract model between single supplier and buyer under centralized system. From the result of experiments we can observe that the proposed model generate better result than the decentralized model.

• Proceedings of the Society of Korea Industrial and System Engineering Conference
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• 2002.05a
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• pp.343-348
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• 2002

We are concerned with a long-term replenishment contract for the ARIMA demand process in a supply chain. The chain is composed of one supplier, one buyer and consumers for a product. The replenishment contract is based upon the well-known (s, Q) policy but allows us to contract future replenishments at a time with a price discount. Due to the larger forecast error of future demand, the buyer should keep a higher level of safety stock to provide the same level of service as the usual (s, Q) policy. However, the buyer can reduce his purchase cost by ordering a larger quantity at a discounted price. Hence, there exists a trade-off between the price discount and the inventory holding cost. For the ARIMA demand process, we present a model for the contract and an algorithm to find the number of the future replenishments. Numerical experiments show that the proposed algorithm is efficient and accurate.