The Ordering Policy under Fluctuating Cost

• Main Authors: Chia-Wen Sheng, 盛加雯
• Other Authors: 曾富祥
• Format: Others
• Language: en_US
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/96892897959287807559

碩士 === 國立中央大學 === 工業管理研究所 === 102 === Growing international demand increasing recently pushed prices to unknown level. Naturally,the future market prices are stochastic. Procurement has been identified as a main ability to compete in the global marketplace in a manufacture's. Many procurement staff confronts one of the greatest challenges which are how to match the demand in the factory when material cost is always uncertainty. Price paid in procurement markets can highly influence the total cost.The decision to be made is facing fluctuating market price at which price to purchase. Nowadays, raw material price are responsible for an increasing portion of total procurement cost. One of the complexities that decision-maker must deal with is to judge the price increase or decrease in the future. Therefore, for decision-maker, the information of the inventory in previous period and the real market price can help them to determine the appropriate lot size in each period.We are going to take leading indicator into account and provide an ordering policy to fit different situations. According to leading indicator, help us predict the price trend.When the leading indicator show that the price might go down in near future, we would keep remained inventory or ordering little quantities to wait a better market price to purchase more; or, when the leading indicator show the price might go up in near future, we would purchase at low spot price or discrete order quantity to avoid the risk of price.