供应链管理（英文课件）Chapter6-Supply Contracts.pptVIP

* Appropriate Mix of Contracts How much to commit to a long-term contract? Base commitment level. How much capacity to buy from companies selling option contracts? Option level. How much supply should be left uncommitted? Additional supplies in spot market if demand is high * Appropriate Mix of Contracts Hewlett-Packard’s (HP) strategy for electricity or memory products About 50% procurement cost invested in long-term contracts 35% in option contracts Remaining is invested in the spot market. * Risk Trade-Off in Portfolio Contracts If demand is much higher than anticipated Base commitment level + option level Demand, spot market. The worst time to buy in the spot market Prices are high due to shortages. * Risk Trade-Off in Portfolio Contracts A trade-off level between price risk, shortage risk, and inventory risk: For the same option level, the higher the initial contract commitment, the smaller the price risk but the higher the inventory risk. The smaller the level of the base commitment, the higher the price and shortage risks due to the likelihood of using the spot market. For the same level of base commitment, the higher the option level, the higher the risk assumed by the supplier since the buyer may exercise only a small fraction of the option level. * Risk Trade-Off in Portfolio Contracts Low High Option level Base commitment level High Inventory risk (supplier) N/A* Low Price and shortage risks (buyer) Inventory risk (buyer) *For a given situation, either the option level or the base commitment level may be high, but not both. * * Chapter 6: Supply Contracts * Dr. YANG Ruina * * Agenda Introduction Contracts for Strategic Components Contracts with Asymmetric Information Contracts for Nonstrategic Components * Introduction Significant increase of outsourcing -- From complete manufacturing to the design and assembly of the entire products More outsourcing has meant Search for lower cost manufacturers Development of design and manuf