Assessment of hedging strategy on supply chain performance with a single supplier and two retailers

The previous studies have shown that the application of option contracts affects coordination supply chain. Though, based on authors’ research there appears to be no survey conducted measure effect hedging chain from quantitative viewpoint. Generally, it is assumed product price held fixed in hedging; however, competitors or partners might sell cheaper. This condition restricts hedger's opportunity benefit. In this study we examine if through improves performance total To illustrate answer, consisting one supplier and two retailers are considered. Regarding hedging, eight scenarios created. results indicate profit at maximum benefit- among all possible scenarios- when completed properly. provides new insights how can maximize profit, although each individual member’s may not maximized.