A portfolio approach to procurement contracts

• 成果类型: Article
• 署名作者: Martínez-De-Albéniz, V; Simchi-Levi, D
• 署名单位: University of Navarra; IESE Business School; Massachusetts Institute of Technology (MIT)
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• 发表日期: 2005
• 页码: 90-114
• 关键词: procurement; supply contracts; capacity options; sourcing diversification

摘要

The purpose of this paper is to develop a general framework for supply contracts in which portfolios of contracts can be analyzed and optimized. We focus on a multi-period environment with convex contract, spot market, and inventory holding costs. We specialize the model to the case of a portfolio consisting of option contracts. We characterize the optimal replenishment policy and show that it has a simple structure. Namely, the use of every different option contract and the spot market is dictated by a modified base-stock policy. In addition, we derive conditions to determine when an option is relatively attractive compared to other options or the spot market. Finally, we present our computational study, where we report the sensitivity of the results to the parameters of the model. Our experiments indicate that portfolio contracts not only increase the manufacturer's expected profit, but can also reduce its financial risk.