Quantity flexibility contracts under bayesian updating
For example, decisions include whether a mandatory evacuation should be issued, where emergency evacuation shelters should be located, and what are the appropriate quantities of emergency supplies that should be stockpiled at various locations.This paper incorporates one of the National Hurricane Center's official prediction models into a Bayesian decision framework to address complex decisions made in response to an observed tropical cyclone.One resolution offered in the literature to overcome this issue is the Quantity Flexibility contract, where the retailer guarantees to order no less than a certain percentage of the initial estimate and the manufacturer guarantees to deliver a certain percentage above.Hurricane forecasts are intended to convey information that is useful in helping individuals and organizations make decisions.While there are examples of promising approaches to manage climate risk, the gap between research and implementation, especially in view of regulatory and institutional constraints, remains a challenge.
Current water management and planning principles typically do not address risk that changes over time, leaving society exposed to more risk than anticipated.A central challenge to water planning and management is learning to plan for plausible future climate conditions that are wider in range than those experienced in the 20th century. Shifts in the hydrological regime due to glacier melting will alter stream water volume, water temperature, runoff timing, and aquatic ecosystems in these regions.Doing so requires approaches that evaluate plans over many possible futures instead of just one, incorporate real-time monitoring and forecast products to better manage extremes when they occur, and update policies and engineering principles with the best available geoscience-based understanding of planetary change. Two maps showing groundwater depletion rates, in units of cubic kilometers per year, for major aquifers in the contiguous United States. In Impacts, Risks, and Adaptation in the United States: Fourth National Climate Assessment, Volume II [Reidmiller, D. As temperatures continue to rise, there is a risk of decreased and highly variable water supplies for human use and ecosystem maintenance.The Bayesian decision process accounts for the trade-off between improving forecast accuracy and deteriorating cost efficiency (with respect to implementing a decision) as the storm evolves, which is characteristic of the above-mentioned decisions.The specific application addressed in this paper is a single-supplier, multi-retailer supply chain system in which demand at each retailer location is a random variable that is affected by the trajectory of an observed hurricane.