Managing material shortages in project supply chains: Inventories, time buffers, and supplier flexibility
研究了项目型企业在面对活动时间和物料消耗不确定性时，如何通过灵活批发价格合同与供应商分担风险，优化项目交付期和物料订购量，以应对物料短缺。
We consider a two‐stage project supply chain with a downstream project firm producing an engineer‐to‐order (ETO) complex product or a make‐to‐order (MTO), low‐volume, customized industrial product as a project, and an upstream contract supplier supplying a key material to the project. The project faces two uncertainties: project activity time uncertainty and material consumption uncertainty, which may be positively or negatively correlated. In anticipation of these uncertainties, the project firm has to carefully decide its promised project due date to its project customer, against which harsh penalties will be assessed, and his material order quantity to commit to the contract supplier in advance. In most practical settings, project firms order from contracted suppliers via a flexible wholesale price contract consisting of a discounted advance order price and a risk‐premium adjusted expedite order price. The discounted advance order price encourages the project firm to take more inventory risk in the supply chain, and the expedite order price incentivizes the supplier to bear more inventory risk by carrying safety stock in excess of the project firm's advance material order. We formulate an optimization model that solves the project firm's project due date and material order problem, which takes into account the supplier's strategic reaction to the project firm's material order under the flexible wholesale price contract. We show that for MTO projects, risk‐sharing with suppliers on project materials is less important to the project firm, with the project firm assuming ownership of all material inventory in the channel and setting a deliberate project due date being the key. On the other hand, for ETO projects, risk‐sharing with contracted suppliers assumes critical importance. Project firms managing ETO projects should fully exploit the flexibility in the material supply contract to optimally drive the supplier's safety stock level and set the project due date reflecting the shared risk in the supply chain.