Selection Analysis Of Supply Contract Based On Bidirectional Options And Duoptions

Bidirectional options and duoptions are two efficient ways to improve the performance of traditional supply chains. They are two similar ways to provide supply chain with flexibility for order decision. Both bidirectional options and duoptions can improve the performance of traditional supply chains. Also, they can adjust the initial order upward or downward too. However, the application of bidirectional options and duoptions could generate risks. There are much common between bidirectional options and duoptions. There for, we make a comparative analysis between bidirectional options and duoptions.First,this article analysis retailers' decision-making and the degree of profit improved in duoptions mode and bidirectional options. Then the article compares the profit and the performance of supply chain between bidirectional options and duoptions.Second, the paper studied the risks when introducing bidirectional options and duoptions, namely, the situation that the profits were below the original ones. Next up,the paper research the changing situation of risks by changing different parameter.Finally, the paper comprehensively considerate the influence of profits and risks and united the profits and risks as one parameter. Last, we compare the parameter and get the Profitability in different market circumstances.Through the comparative analysis between bidirectional options and duoptions,we get buyer can get more profits by introducing duoptions compared with bidirectional options. However, with the uses of duoptions, buyer have to suffer more risk. When comprehensively considerate the influence of profits and risks, buyer may would like to use duoptions when the wec (or wep) is relativity high or low.