We study a failure fee contract designed by a price-setting newsvendor retailer under information asymmetry. Under the contract, the manufacturer must pay the retailer a failure fee if the sales volume misses a target. We propose and compare two types of failure fee contracts: a brand-by-brand...

This paper studies the arc-routing problem that arises in small-package delivery. In practice, each service provider is encouraged to follow a master route — a predesigned sequence of street addresses — over an extended planning horizon (more than one day). The objective here is to construct...

The price of financial derivative with unilateral counterparty credit risk can be expressed as the price of an otherwise risk-free derivative minus a credit value adjustment(CVA) component that can be seen as shorting a call option, which is exercised upon default of counterparty, on MtM of the...