Optimal bunkering contract in a buyer–seller supply chain under price and consumption uncertainty

Bunker fuel constitutes about three quarters of the operational costs for liners. A strong effort is justified to define operational conditions and management strategies to minimize fuel-related costs, especially if the variability of fuel price is considered. Fuel sellers and liners use contracts to be guaranteed a refuelling quantity and control bunker price. We propose a game theory based approach to examine and optimize the parameters of a realistic bunkering contract. Under the proposed settings, the supplier and the buyer establish the bunker quantity and the price to maximize the expected profit and minimize the expected refuelling cost, respectively.