Commodity procurement with operational and financial instruments PDF Download

Author: Jan Arnold
Publisher:
ISBN:
Category :
Languages : en
Pages : 149

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Author: Jan Arnold
Publisher: Gabler Verlag
ISBN: 9783834922557
Category : Business & Economics
Languages : en
Pages : 0

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Jan Arnold integrates financial and operational aspects into a holistic approach to commodity procurement. He shows how to combine operational strategies considering just-in-time procurement, inventory holding and backlogging with financial strategies considering derivative instruments into an optimal procurement plan under volatile procurement prices.

Author: Jan Arnold
Publisher: Springer Science & Business Media
ISBN: 3834986542
Category : Business & Economics
Languages : en
Pages : 159

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Jan Arnold integrates financial and operational aspects into a holistic approach to commodity procurement. He shows how to combine operational strategies considering just-in-time procurement, inventory holding and backlogging with financial strategies considering derivative instruments into an optimal procurement plan under volatile procurement prices.

Author: Andrea Roncoroni
Publisher: John Wiley & Sons
ISBN: 0470661836
Category : Business & Economics
Languages : en
Pages : 1076

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Handbook of Multi-Commodity Markets and ProductsOver recent decades, the marketplace has seen an increasing integration, not only among different types of commodity markets such as energy, agricultural, and metals, but also with financial markets. This trend raises important questions about how to identify and analyse opportunities in and manage risks of commodity products. The Handbook of Multi-Commodity Markets and Products offers traders, commodity brokers, and other professionals a practical and comprehensive manual that covers market structure and functioning, as well as the practice of trading across a wide range of commodity markets and products. Written in non-technical language, this important resource includes the information needed to begin to master the complexities of and to operate successfully in today’s challenging and fluctuating commodity marketplace. Designed as a practical practitioner-orientated resource, the book includes a detailed overview of key markets – oil, coal, electricity, emissions, weather, industrial metals, freight, agricultural and foreign exchange – and contains a set of tools for analysing, pricing and managing risk for the individual markets. Market features and the main functioning rules of the markets in question are presented, along with the structure of basic financial products and standardised deals. A range of vital topics such as stochastic and econometric modelling, market structure analysis, contract engineering, as well as risk assessment and management are presented and discussed in detail with illustrative examples to commodity markets. The authors showcase how to structure and manage both simple and more complex multi-commodity deals. Addressing the issues of profit-making and risk management, the book reveals how to exploit pay-off profiles and trading strategies on a diversified set of commodity prices. In addition, the book explores how to price energy products and other commodities belonging to markets segmented across specific structural features. The Handbook of Multi-Commodity Markets and Products includes a wealth of proven methods and useful models that can be selected and developed in order to make appropriate estimations of the future evolution of prices and appropriate valuations of products. The authors additionally explore market risk issues and what measures of risk should be adopted for the purpose of accurately assessing exposure from multi-commodity portfolios. This vital resource offers the models, tools, strategies and general information commodity brokers and other professionals need to succeed in today’s highly competitive marketplace.

Author: B. G. Kingsman
Publisher: Elsevier
ISBN: 1483297268
Category : Business & Economics
Languages : en
Pages : 428

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A systematic study of commodity purchasing analysed from an operational research viewpoint and based on numerous case studies.

Author: Niti Nandini Chatnani
Publisher:
ISBN: 9780070682146
Category : Commodity exchanges
Languages : en
Pages : 299

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Author: Yihua Xu
Publisher: Open Dissertation Press
ISBN: 9781361476444
Category :
Languages : en
Pages :

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This dissertation, "Procurement Risk Management Using Commodity Futures: a Multistage Stochastic Programming Approach" by Yihua, Xu, 許意華, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: ABSTRACT This study addresses the procurement risks that arise from variations in customer demand and fluctuations in the prices of material to be purchased, and seeks ways to effectively manage these risks. Procurement is prone to risks due to the uncertainties in, for example, demand, price and delivery. The effective management of these risks is hence a critical provision within the framework of procurement planning. However, what generally interests a procurement manager, when attempting to match closely product supply with customer demand, is the lowest cost that could possibly be attained. This mindset is found to concur with traditional models for procurement planning, which tend also to focus on cost minimization or the maximization of profit. With the potential risks largely ignored, such traditional models are clearly inadequate in the dynamic and precarious environment in which procurement is to be performed. This study describes a procurement planning approach that takes into account the risks arising from the fluctuations in procurement prices and customer demand volatility during a procurement undertaking. From the perspective of risk management, procurement is concerned with minimizing the downside risk exposure by means of hedging the associated risks so as to avoid possible losses. The specific risk hedging method developed in this study is based on the commodities and derivatives markets, which have grown rapidly and flourished in the age of e-commerce. This method is based on the static financial risk-hedging models that deal with a fixed hedged quantity. However, in making operational decisions in which the purchased quantity fluctuates due to customer demand, hedging has to be performed dynamically and this forms a significant extension to the available models. To allow and support operational procurement decision making as well as financial risk hedging in the presence of commodity markets, an integrated procurement risk management framework is developed. The development of this framework involves three major research issues (i) the establishment of a quantitative procurement risk management framework; (ii) the modelling of the stochastic behaviour of commodity prices and customer demand; and (iii) in II matching the two stochastic quantities mentioned above, the modelling of the procurement planning and financial risk hedging problem, jointly represented as a multistage stochastic program. The solutions obtained from this stochastic programming model can be evaluated according to the specified profit/risk profiles of a decision maker. To model the stochastic behaviour of commodity prices, the Gibson-Schwartz two-factor model and the Schwartz-Smith two-factor model are employed for storable commodities and non-storable commodities respectively. State-space form models and Kalman filtering are used to estimate the parameters of the empirical price models based on historical commodity price data. Two commodities are studied in this research. One is copper which is storable, and the other is electricity which is non-storable. Using the empirical price models, scenarios can be generated for stochastic program optimization. Numerical experiments are carried out to demonstrate the benefit that could be gained from the use of the integrated procurement risk management approach developed in this study. It is found that, when compared with pure operational pla

Author: Soumaré, Issouf
Publisher: Edward Elgar Publishing
ISBN: 1800887043
Category : Business & Economics
Languages : en
Pages : 328

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Commodities are basic goods used in commerce and are most often used as inputs in the production of other semi-finished or finished materials. They are very important products in our lives today and constitute non-negligible sources of income for many countries. This book serves as a guide to the marketing of these goods and provides scholars and commodity market participants with useful concepts, tools and guidelines to better organize and operate commodities exchanges.

Author: Ehsan Bolandifar
Publisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages : 184

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This dissertation focuses on three major topics: (1) Commodity procurement in cash constrained supply chain (the first essay coauthored with Panos Kouvelis and Danko Turcic); (2) Contract enforceability and capacity investment in supply chains (co-work with Fuqiang Zhang and Tianjun Feng) and finally (3) Optimal component procurement mechanism in multi-tier supply chains (co-work with Panos Kouvelis and Fuqiang Zhang). The first part of my dissertation focuses on commodity and capacity procurement in a cash-constrained supply chain in which a manufacturer sources its parts from a supplier. Both firms rely on credit, require commodity inputs, and face some operational and financial frictions. Although both firms are risk-neutral, we demonstrate that the value of hedging in commodity procurement depends on the nature of the supply chain and on the contracting mechanism. In a decentralized supply chain, where the seller makes the buyer a take- it-or-leave-it offer, we find that hedging either increases supply chain efficiency or wholesale prices, hedging benefits the hedgers trading partner, and that it might be counterproductive to the hedger. The insight that the hedger may be worse off with hedging, however, fails to carry over to the case where the seller and the buyer adopt a Nash bargaining equilibrium. Moreover, in the take-it-or-leave-it setting, we find that the potential negative impact of hedging on the hedgers payoff can be greatly mitigated by the use of a pass-through contract. Under such contract, the downstream firm assumes full responsibility for purchasing and hedging the commodity inputs for the entire supply chain. The empirical implication of this finding is that the downstream firm has an economic incentive to hedge and coordinate raw material procurement in the entire cash-constrained supply chain. In the second part of my dissertation, we study the effect of enforceability of procurement contracts (double moral hazard) on capacity procurement and risk allocation between a buyer and its supplier where capacity cost is supplier's private information. We show that buyer's optimal contract and capacity risk allocations depend critically on a ratio that we called modified reversed hazard rate of the supplier's cost distribution. We study the value of contract enforceability and interestingly show that under certain conditions a simple pull contract with an easily determined unit price is the optimal contract that can be offered by the buyer. This result provides a new explanation for the prevalence of pull contracts in practice. And finally the last chapter of my dissertation studies delegation vs. control of part procurement in a three-tier supply chain. We model two competing OEMs that produce substitutable products and procure similar parts from a component manufacturer (CM) which needs a key component to produce these parts. OEMs can delegate key component procurement to their CM or control CMs procurement. We identify two different contracting power relationships (regimes) in supply chain and characterize sub-game perfect equilibrium under these regimes: supplier Satckelberg regime, where supplier is the Stackelberg leader in pricing game and OEMs Stackelberg regime, where OEMs are the first mover. Under supplier Stackelberg regime, We find that in a symmetric model all firms are indifferent between delegation and control of key part procurement but in an asymmetric case, the smaller OEM prefers to control CMs key part procurement while the larger OEM gets worse off. Under OEMs Stackelberg regime, we show that when downstream competition is high, i.e., when products are close substitutes, both OEMs prefer to directly contract with supplier to control key component procurement. Interestingly, in equilibrium consumer surplus is independent of contracting power distribution in supply chain. We find that in a symmetric model all firms are indifferent between delegation and control of key part procurement but in an asymmetric case, the smaller OEM prefers to control CMs key part procurement while the larger OEM gets worse off. Under OEMs Stackelberg regime, we show that when downstream competition is high, i.e., when products are close substitutes, both OEMs prefer to directly contract with supplier to control key component procurement. Interestingly, in equilibrium consumer surplus is independent of contracting power distribution in supply chain.

Author: United States. Congress. House. Committee on Government Operations. Commerce, Consumer, and Monetary Affairs Subcommittee
Publisher:
ISBN:
Category :
Languages : en
Pages : 1542

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