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Damian R. Beil - One of the best experts on this subject based on the ideXlab platform.
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Simple Auctions for Supply Contracts
Management Science, 2013Co-Authors: Izak Duenyas, Damian R. BeilAbstract:This paper studies an optimal procurement mechanism for a newsvendor-like problem where the buyer's (newsvendor's) purchase price of the supplies is not fixed, but determined through interaction with candidate suppliers. The buyer has priors on the suppliers' costs but does not know their costs exactly. Recent literature has shown how the buyer can implement the optimal procurement mechanism by announcing a revenue function (specifying a payment for each quantity the buyer may purchase), then auctioning off the Supply Contract with the specified revenue function. In this paper, we show that a simple modified version of the standard open-descending auction for a fixed quantity is also an optimal mechanism for obtaining supplies. What distinguishes this mechanism is its simplicity and familiarity for the suppliers---open-descending auctions are very easy to run and ubiquitous in practice, whereas auctioning Supply Contracts with a specified revenue function is much less observed and more difficult to explain to suppliers. Furthermore, we show that this simple mechanism can be easily generalized to ex ante asymmetric suppliers and a class of nonlinear production costs. This paper was accepted by Yossi Aviv, operations management.
Fangruo Chen - One of the best experts on this subject based on the ideXlab platform.
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Auctioning Supply Contracts
Management Science, 2007Co-Authors: Fangruo ChenAbstract:This paper studies a procurement problem with one buyer and multiple potential suppliers who hold private information about their own production costs. Both the purchase quantity and the price need to be determined. An optimal procurement strategy for the buyer requires the buyer to first design a Supply Contract that specifies a payment for each possible purchase quantity and then invites the suppliers to bid for this Contract. The auction can be conducted in many formats such as the English auction, the Dutch auction, the first-priced, sealed-bid auction, and the Vickrey auction. The winner is the supplier with the highest bid, and is given the decision right for the quantity produced and delivered. Applying this theory to a newsvendor model with Supply-side competition, this paper establishes a connection between the above optimal procurement strategy and a common practice in the retail industry, namely, the use of slotting allowances and vendor-managed inventory. Also discussed in the newsvendor context are the role of well-known Supply Contracts such as returns Contracts and revenue-sharing Contracts in procurement auctions, the scenarios where the buyer and suppliers may possess asymmetric information about the demand distribution, and how the cost of Supply-demand mismatch is affected by Supply-side competition. Finally, this paper compares the optimal procurement strategy with a simpler but suboptimal strategy where the buyer first determines a purchase quantity and then seeks the lowest-cost supplier for the quantity in an auction.
Jean-paul Bourrières - One of the best experts on this subject based on the ideXlab platform.
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The impact of Supply Contracts on Supply chain product-flow management
Journal of Manufacturing Systems, 2011Co-Authors: Aicha Amrani, Jean-christophe Deschamps, Jean-paul BourrièresAbstract:One of the performance issues faced by the Supply chain (SC) is the competitive production and delivery of products to all partners of the SC. The Supply Contract linking the Original Equipment Manufacturer (OEM) with its suppliers currently represents an important decision tool influencing the production and delivery of final products. The aim of this article is to investigate by simulation the sensitivity of the Supply chain's performance to the variations of two main Supply commitments negotiated by Contract: flexibility rate and frozen horizon. Each partner belonging to the SC of the OEM performs its own production planning process. A generic analytical model is proposed and applied to simulate the decisional behaviour of each partner in planning its production activities. Contractual constraints (resulting from Supply Contracts) are formalised and incorporated into the model to allow the study of their impact. Experiments are carried out through a mobile phone SC case study confronted with market fluctuation. The performance of a partner and a SC is assessed via different indicators, mainly the cost and the reliability. The computational results address some managerial findings that are helpful in defining an interesting Supply Contract along the SC to achieve global performance.
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Efficient dimensioning of flexibility commitments among Supply chain partners
2010Co-Authors: Aicha Amrani, Jean-christophe Deschamps, Jean-paul BourrièresAbstract:Partners relationships are usually formalized by Supply Contracts wherein commitments are negotiated. The scope of this paper deals with especially flexibility commitments supposed to enable the Supply chain to face demand fluctuation through a better adaptation to the market. We investigate by simulation the adequate dimensioning of flexibility rate that leads to win-win relationship between OEM (Original Equipment Manufacturer) and its suppliers along the Supply chain. To analyse the impact of flexibility rate on each partner of the Supply chain, production planning model is used and depicted under rolling horizon planning principle. Simulations are carried out through telecom study case performed within developed simulation platform. Computational results illustrate how afford deciders to get better understanding of performant dimensioning of flexibility commitment in Supply Contract.
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Efficient dimensioning of flexibility commitments among Supply chain partners
2010Co-Authors: Aicha Amrani, Jean-christophe Deschamps, Jean-paul BourrièresAbstract:Partners relationships are usually formalized by Supply Contracts wherein commitments are negotiated. The scope of this paper deals with especially flexibility commitments supposed to enable the Supply chain to face demand fluctuation through a better adaptation to the market. We investigate by simulation the adequate dimensioning of flexibility rate that leads to win-win relationship between OEM (Original Equipment Manufacturer) and its suppliers along the Supply chain. To analyse the impact of flexibility rate on each partner of the Supply chain, production planning model is used and depicted under rolling horizon planning principle. Simulations are carried out through telecom study case performed within developed simulation platform. Computational results illustrate how afford deciders to get better understanding of performant dimensioning of flexibility commitment in Supply Contract.
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Supply Chain Reactivity Assessment Regarding Two Negotiated Commitments: Frozen Horizon and Flexibility Rate
2009Co-Authors: Aïcha Amrani-zouggar, Jean-christophe Deschamps, Jean-paul BourrièresAbstract:The problem addressed in this paper is the Supply chain reactivity assessment through numerical experimentations regarding specifically two negotiated commitments within Supply Contract: the frozen horizon and flexibility rate. Analysis of impact of these commitments on each partner will be depicted in term of storage costs, reliability and reactivity indicators. The decision making inside each partner is operated under rolling horizon planning and based on production linear programming model wherein different Contractual commitments are included. To carry out experimental scenarios, simulation platform is developed from which expecting numerical results afford deciders to get more understanding about the commitments that should be Contracted and the relevant dimensioning of them.
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Supply chain planning under various quantity commitment Contracts
2009Co-Authors: Aicha Amrani, Jean-christophe Deschamps, Jean-paul BourrièresAbstract:This paper explores a type of Supply Contract under which the purchaser commits to buy a quantity of product per period with a granted flexibility over a certain horizon of time. We build a finite horizon linear programming model to characterize dynamically the production and replenishment planning depicted on each actor of the Supply chain. This model based on rolling horizon planning considers gradually the emergence of new information (demand peak occurrence, disturbance on deliveries in workflow...) and takes account undergoing Contractual Supply constraints from the supplier. The purpose is then to investigate by numerical experimentations the impact of Supply commitments Contracted by partners on Supply chain performance and responsiveness in order to draw some managerial insights
T. Mishina - One of the best experts on this subject based on the ideXlab platform.
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Supply Contract with options
International Journal of Production Economics, 2009Co-Authors: A. Gomez_padilla, T. MishinaAbstract:The purpose of this paper is to analyze the impact of an option Contract for two companies of a Supply chain: retailer and supplier. With an option Contract the retailer orders a quantity of units and has the right to modify his order if necessary. A model to calculate the performance of an option Contract in terms of Contract value for the two companies engaged is presented. The two considered cases are multiple suppliers and one retailer, and one supplier and one retailer. The performance improvement obtained using this kind of Contract is compared by simulation.
Joaquim Domingues - One of the best experts on this subject based on the ideXlab platform.
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Reliability Modelling: Petrobras 2010 Integrated Gas Supply Chain
2010 8th International Pipeline Conference Volume 4, 2010Co-Authors: Denise Faertes, Leonardo Saker, Luciana Heil, Flavia Vieira, Francisco Risi, Joaquim Domingues, Tobias Alvarenga, Patricia Mussel, Eduardo CarvalhoAbstract:The purpose of this paper is to present the innovative reliability modeling of Petrobras 2010 integrated gas Supply chain. The model represents a challenge in terms of complexity and software robustness. It was jointly developed by PETROBRAS Gas & Power Department and Det Norske Veritas. It was carried out with the objective of evaluating security of Supply of 2010 gas network design that was conceived to connect Brazilian Northeast and Southeast regions. To provide best in class analysis, state of the art software was used to quantify the availability and the efficiency of the overall network and its individual components (such as gas processing units, city-gates, compressor stations, pipelines). The study requests, as input, a lot of information, that should be provided from different sectors of Petrobras, since it is supposed to depict reliability performance of all gas Supply chain players. Information such as 2010 design configurations, gas offer and demand profiles, shedding priority, pressure delivery conditions, Supply Contract and associated penalties, commodity prices, etc., should be raised and addressed. More than twelve processing plants were modeled, in a detailed manner, and have their performance indicators compared. Different gas sources were considered in the study, such as offshore platforms, onshore fields, Bolivia pipeline and LNG ships. Detailed failure probability and repair data were addressed. Contingency plans, for each identified scenario, were made, in order to evaluate probable losses that constitute an input for the reliability modeling. Therefore, two additional software’s were used for their validation: - Pipeline studio – TGNET (from Energy Solutions), to check pressure conditions; and an in-house Petrobras software (PLANAGE), used for best gas allocation purposes. Experienced operational team opinion was incorporated on that contingency plans elaboration. This work constitutes a powerful tool for Petrobras planning and optimization of gas Supply chain future configurations. The simulation provides propositions for investments prioritization, based on cost benefit analysis, and as a by-product, contingency plans, that were developed, considering different failure scenarios.Copyright © 2010 by ASME
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Petrobras Amazonia Gas Pipeline: Repair Logistics Evaluation Study
2010 8th International Pipeline Conference Volume 3, 2010Co-Authors: Denise Faertes, Joaquim DominguesAbstract:The purpose of this paper is to present the study concerning the evaluation of the repair logistics of gas pipeline Urucu-Coari-Manaus (extension of 600 km), that was constructed to operate in the Amazon Brazilian region. Repair logistics is a challenge, regarding specific operation conditions in the jungle, environment and flood variations, difficulty on accessing pipeline right-of-way, difficulty on transportation, etc. Workshops were held, gathering most experienced company personnel from different PETROBRAS sectors (engineering, operation, repair centre, integrity area, Brazilian Army, offshore sector, etc.), in order to evaluate and establish strategies for each identified failure scenario, considering type of repair, logistics, resources and costs. The first step of the study was to incorporate the experience obtained from the engineering team, responsible for the construction of Urucu-Coari-Manaus gas pipeline as they had to face unexpected and adverse conditions. Based on their experience, different pipeline sections were defined, considering specific features, like isolation, flooded areas, river crossings, access limitations, etc. The second step was brain-storming workshops with the purpose of providing the best PETROBRAS evaluation of pipeline sections repair strategies, logistics and resources. Failure frequencies were raised and addressed, as well as variables like: - time for failure detection, for digging, for repair, for resources arrival, considering different logistics and transportation modes (using specific boats, helicopters with special characteristics, such as suitable for long line operations (load line greater than one rotor diameter in length), capable of transporting heavy equipment, etc.). Innovative ways of repair were conceived and proposed to be used. Supply Contract conditions for thermo plants, industrial and residential consumers were considered. Finally, a cost/benefit analysis was performed, considering expenses on logistics and resources and benefits associated with avoided losses for each specific failure scenario, in order to provide support for decision making process.© 2010 ASME
