Procurement Strategies for Multiple Inputs

Publication Type

Conference Paper

Publication Date

10-2012

Abstract

This paper analyzes the procurement decision of a firm that produces a single commodity output using two commodity inputs. The firm can source the two inputs in advance of the selling season through long-term contracts or from the spot markets. We investigate the impact of using different contract types (fixed-price versus index-priced) on the profitability of the firm. The main motivation comes from a soda ash producer located in India that procures multiple commodity inputs for production.

Discipline

Agribusiness | Operations and Supply Chain Management

Research Areas

Operations Management

Publication

INFORMS Annual Meeting, Phoenix, 14-17 October 2012

City or Country

Phoenix, AZ, USA

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