Overstock – A Real Option Approach

Authors

  • Rui Fernandes Aveiro University
  • Joaquim Gouveia Aveiro University
  • Carlos Pinho Aveiro University

DOI:

https://doi.org/10.12660/joscmv3n2p98-107

Keywords:

overstock, stock management, real options, supply chain

Abstract

In the last decades, firms have been facing a new challenge, considering the increasing uncertainty of the markets and the pressure to achieve better levels of performance, within the stake-holders expectations. Three main problems have been emerging in dealing with management performance: the increasing pressure to reduce working capital, the growing variety of products and the fulfillment of a demanding service level. Most of the popular indicators have been developed based on a controlled environment. A new indicator is now proposed, based on the uncertainty of the demand, the flexibility of the supply chains, the evolution of the products lifecycle and the fulfillment of a required service level. The model to support the indicator will be developed within the real options approach.

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Published

2010-12-22

Issue

Section

03.Logistics and Supply Chain