Abstract
This research paper builds on existing knowledge in the field of parametric Linear Programming (pLP) and proposes a continuous mathematical model that considers a multi-period Quantity Flexibility (QF) contract between a car manufacturer (buyer) and external parts supplying company. The supplier periodically delivers parts to the car manufacturer as agreed in the contract. Due to the uncertainty of the demand for parts, the car manufacturer -in concert with the supplier-aims to develop a policy -at strategic level, that determines the optimal nominal order quantity (Q) and variation rate (β) underpinning the contract that ensures the actual order quantity satisfies the actual demand and the total cost is minimised over the contract length. The behaviour of the mathematical model has been examined in order to establish its feasibility and convexity, consequently guaranteeing an optimal solution. Simulations have been carried out to evaluate the relationship of the total cost with respect to the variation rate and the nominal quantity ordered.
Original language | English |
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Title of host publication | Proceedings of the 2014 IEEE International Conference on Automation Science and Engineering |
Publisher | Institute of Electrical and Electronics Engineers Inc. |
Pages | 704-709 |
Number of pages | 5 |
ISBN (Print) | 978-1-4799-5283-0, 978-1-4799-5284-7 |
DOIs | |
Publication status | Published - Aug 2014 |
Event | 10th International Conference on Automation Science and Engineering - Taipei, Taiwan, Province of China Duration: 18 Aug 2014 → 22 Aug 2014 http://www.case2014.org/ |
Publication series
Name | International Conference on Automation Science and Engineering |
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Publisher | IEEE |
ISSN (Print) | 2161-8070 |
Conference
Conference | 10th International Conference on Automation Science and Engineering |
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Abbreviated title | CASE 2014 |
Country/Territory | Taiwan, Province of China |
City | Taipei |
Period | 18/08/14 → 22/08/14 |
Internet address |
Keywords
- Contract
- Flexibility analysis
- Modelling