Contingent Claims Contracting for Purchasing Decisions in Inventory Management

Authors

Peter H. Ritchken
Charles S. Tapiero

Document Type

Report

Publication Date

6-1-1984

Abstract

The purpose of this paper is to provide a risk management approach which uses negotiated option contracts for hedging against price and quantity uncertainty in inventory procurement. Conditions for the inclusion of options in inventory control are derived as a function of managerial attitudes towards risk.

Keywords

Operations research, Risk management, Options (Finance), Inventory control, Hedging (Finance), Decision making, Industrial procurement

Publication Title

Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University

Issue

Technical memorandum no. 554

Rights

This work is in the public domain and may be freely downloaded for personal or academic use

Recommended Citation

Ritchken, Peter H. and Tapiero, Charles S., "Contingent Claims Contracting for Purchasing Decisions in Inventory Management" (1984). Research Reports from the Department of Operations. 99.
https://commons.case.edu/wsom-ops-reports/99