DETERMINING THE SCOPE OF SUPPLY OF PRODUCTS IN THE SUPPLY CHAIN

The article discusses the economic behavior of the supplier of goods to companies‑consumers in determining the volume of supply, depending on the terms of the contract. Two situations are considered. The first is that the supplier company, with possible fluctuations relative to the average supply volume, justifies in the contract its size that provides it with the maximum expected income, taking into account possible economic damage when deviations from the delivery interval values specified in the contract. The supplier company is economically interested in supplying such a volume of products that does not go beyond the allowable interval. In this case, the consumer, according to the contract, acquires the entire volume of goods produced at a certain price per unit of production. If the supply of products turns out to be less or more than the boundaries specified in the contract, then the consumer will be forced to incur additional transaction costs. The second situation is described by the model of company‑supplier interaction – the company‑consumer in the supply chain. Considered as a consumer company are those who make further decisions on intermediate goods (technological use, price determination, product promotion actions), and therefore affect the profits of the manufacturing company. Such consumer firms seek to realize their economic interest in the conditions of the contract. The paper considers that the relationship between a manufacturing company and a consumer company is governed by a contract in which settlement between firms is determined according to a linear tariff. In the absence of complete vertical integration, firms operate independently in the market and maximize their own profits. It also analyzes the amount of profit received by participants for the case when the consumer company sells goods to the final consumer in the supply chain with discounts.

production, costs, contract, scope of supply, profit, demand, standard deviation, transaction costs, supply chain, penalties, economic behavior.

Mamonov V. I., Poluektov V. A. Determining the scope of supply of products in the supply chain. Business. Education. Law, 2019, no. 2, pp. 142–148. DOI: 10.25683/VOLBI.2019.47.220.