Entry timing in a secondary market: When to trade?

Tingting Yan, Kevin Dooley

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


In volatile, long-lead time and short selling-season markets, a secondary market enables buyers to update their inventory during the selling season. The decision of when to update involves complicated trade-offs between forecast accuracy, expected lost sales, and average purchasing cost. We use a two-stage inventory replenishment model to identify the optimal trading time across different scenarios. Across most scenarios the optimal trading time is around the midpoint of the season and is sensitive to the expected profit margin and demand forecast errors. We discuss the impacts of the timing decision on upstream suppliers' sales and channel performance in terms of sales revenue and supply-demand mismatch costs. Specifically, secondary market trading always reduces upstream suppliers' sales no matter when trading occurs, but trading at an optimal time can maximize a secondary market's profit gain over the no-trade scenario through reducing supply-demand mismatch.

Original languageEnglish (US)
Pages (from-to)62-74
Number of pages13
JournalInternational Journal of Production Economics
Issue number1
StatePublished - Mar 2010


  • Electronic surplus market
  • Entry timing
  • Information learning
  • Supply chain management
  • Two-stage inventory replenishment

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering


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