供应链ch4 Supply contracts幻灯片.pptVIP

Chapter 4 Supply Contracts 4.1 Introduction Significant level of outsourcing Many leading brand OEMs outsource complete manufacturing and design of their products Procurement function in OEMs becomes very important OEMs have to get into contracts with suppliers For both strategic and non-strategic components 4.2 Strategic Components What should be included in a Supply Contract? 4.2 Strategic Components Supply Contract can include the following: Pricing and volume discounts. Minimum and maximum purchase quantities. Delivery lead times. Product or material quality. Product return policies. What are the potential impacts of a supply contract on supply chain partners? 2-Stage Sequential Supply Chain A buyer and a supplier. Buyer’s activities: generating a forecast determining how many units to order from the supplier placing an order to the supplier so as to optimize his own profit Purchase based on forecast of customer demand Supplier’s activities: reacting to the order placed by the buyer. Make-To-Order (MTO) policy Swimsuit Example 2 Stages: a retailer who faces customer demand a manufacturer who produces and sells swimsuits to the retailer. Retailer Information: Summer season sale price of a swimsuit is $125 per unit. Wholesale price paid by retailer to manufacturer is $80 per unit. Salvage value after the summer season is $20 per unit Manufacturer information: Fixed production cost is $100,000 Variable production cost is $35 per unit Supply Contracts Sequential Supply Chain Demand Scenarios What Is the Optimal Order Quantity? Retailer marginal profit is the same as the marginal profit of the manufacturer, $45. Retailer’s marginal profit for selling a unit during the season, $45, is smaller than the marginal loss, $60, associated with each unit sold at the end of the season to discount stores. Retailer optimal policy is to order 12,000 units for an average profit of $470,700. If the retailer places this order, the manufacturer’s profit is 12,000(80 - 3