This paper develops a framework for examining the effect of demand uncertainty and forecast error on unit costs and customer service levels in the supply chain, including Material Requirements Planning (MRP) type manufacturing systems. The aim is to overcome the methodological limitations and confusion that has arisen in much earlier research. To illustrate the issues, the problem of estimating...

Wind imposes costs on power systems due to uncertainty and variability of real-time resource availability. Stochastic programming and demand response are offered as two possible solutions to mitigate these so-called wind-uncertainty costs. We examine the benefits of these two solutions, and show that although both will reduce wind-uncertainty costs, demand response is significantly more effecti...

Supply chain management is taken into account as an inseparable component in satisfying customers' requirements. This paper deals with the distribution network design (DND) problem which is a critical issue in achieving supply chain accomplishments. A capable DND can guarantee the success of the entire network performance. However, there are many factors that can cause fluctuations in input dat...

We consider a seller with uncertain demand for its product. If the demand curve were certain, then setting price and setting quantity would be equivalent ways to frame the seller’s problem of choosing a profit-maximizing point on its demand curve. With uncertain demand, these become distinct sales mechanisms. We distinguish between uncertainty about the market size and uncertainty about the con...

The main purpose of this research is to investigate the effects of market demand uncertainty in the coopetitive insurance market. To that end, we build a game-theory model including training investments of insurance agents in an insurance market with demand uncertainty. We derive the following results from our analysis. First, insurance firms undertake less training investment if it is determin...