This paper analyzes a unit-contingent power purchase agreement between an electricity distributor and a power plant. Under such a contract the distributor pays the plant a fixed price if the plant is operational and nothing if plant outage occurs. Pricing a unit-contingent contract is...

This paper analyzes a unit-contingent power purchase agreement between an electricity distributor and a power plant. Under such a contract the distributor pays the plant a fixed price if the plant is operational and nothing if plant outage occurs. Pricing a unit-contingent contract is...

Frequently, manufacturers experience supply disruptions due to supplier bankruptcies. Manufacturers can increase supplier reliability by providing suppliers subsidies in excess of suppliers' production costs. We examine the optimal subsidy decisions of manufacturers in four supply chain...