Findings on Industrial Engineering Reported by Investigators at Xi’an Jiao Tong University (A Relief Supplies Purchasing Model Based On a Put Option Contract)

2019 APR 12 (NewsRx) -- By a News Reporter-Staff News Editor at Engineering Daily News -- Researchers detail new data in Engineering - Industrial Engineering. According to news reporting out of Shaanxi, People’s Republic of China, by NewsRx editors, research stated, “Relief supply management is one of the most important parts in emergency management. Because of high uncertainty and time urgency, relief supplies should be purchased in advance as stock before disasters occurs.”

Financial support for this research came from National Natural Science Foundation of China.

Our news journalists obtained a quote from the research from Xi’an Jiao Tong University, “The purchasers of relief supplies are mainly governments. As in commercial supply management, governments face inventory risk and stock-out risk in their management of relief supplies. Stock-out risk can be solved by spot markets and in-kind donations, while there is no good solution to inventory risk. It is highly possible that pre-reserved relief supplies are not used within their validity periods because of the low frequency of disasters, which causes huge losses to governments. To solve the problem, we introduce a put option contract into relief supply management by considering the system as a relief supply chain. We explore the characteristics of the put option contract and prove that it can provide coordination of the relief supply chain. Furthermore, we make comparison between the put option contract, wholesale price contract and buyback contract under the same conditions to show the superiority of the put option contract.”

According to the news editors, the research concluded: “Meanwhile, we also present the condition that both a government and a supplier conduct transactions and achieve a win-win situation based on the put option contract.”

For more information on this research see: A Relief Supplies Purchasing Model Based On a Put Option Contract. Computers & Industrial Engineering, 2019;127():253-262. Computers & Industrial Engineering can be contacted at: Pergamon-Elsevier Science Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, England. (Elsevier - www.elsevier.com; Computers & Industrial Engineering - http://www.journals.elsevier.com/computers-and-industrial-engineering/)

Our news journalists report that additional information may be obtained by contacting Z.Q. Hu, Xi’an Jiao Tong University, School of Management, 28, Xianning West Rd, Xian 710049, Shaanxi, People’s Republic of China. Additional authors for this research include J. Tian and G.Z. Feng.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.cie.2018.12.015. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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