Homework__4

Homework__4 - Management Science & Engineering 369...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Management Science & Engineering 369 Spring, 2008 Homework #4 Due: Beginning of class, May 6 1. Contract valuation Questions: a) A supplier of a commodity product offers flexible quantity contracts to its customers. Compare the suppliers revenue exposure if the contract pricing is:- Index (market) based - Fixed price Which is more risky? Is there an unambiguous answer to this question? b) The same supplier also sells custom products. For buyers of these products, the supplier is the only available source. Compare the suppliers revenue exposure under flex quantity contracts for such products if the contract pricing is:- Index (market) based- Fixed price 2. Sell-through and buy-out options Buyers who agree to commit to fixed quantity contracts for commodity products often request either or both sell-through rights, which allow them to sell to others quantity which they must take under the contract in excess of the quantity they require, and buy- out options, which allow them to buy themselves out of some or all of their committed...
View Full Document

This note was uploaded on 06/16/2010 for the course MS&E 369 taught by Professor Blakejohnson during the Spring '08 term at Stanford.

Page1 / 2

Homework__4 - Management Science & Engineering 369...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online