Procurement

About: Procurement is a research topic. Over the lifetime, 25669 publications have been published within this topic receiving 334145 citations.

Contingent sourcing under supply disruption and competition

Abstract: With the increasing awareness of the serious consequences of supply disruption risk, firms adopt various kinds of strategies to mitigate it We consider a supply chain in which two suppliers sell components to two competing manufacturers producing and selling substitutable products Supplier U is unreliable and cheap, while Supplier R is reliable and expensive Firm C uses a contingent dual-sourcing strategy and Firm S uses a single-sourcing strategy We study the implications of the contingent sourcing strategy under competition and in the presence of a possible supply disruption The time of the occurrence of the supply disruption is uncertain and exogenous, but the procurement time of components is in the control of the firms We show that supply disruption and procurement times jointly impact the firms’ buying decisions We characterise the firms’ optimal order quantities and their expected profits under different cases Subsequently, through numerical computations, we obtain additional managerial ins

Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California

Abstract: We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.

The supplier selection problem with quantity discounts and truckload shipping

Abstract: To minimize procurement expenditures both purchasing and transportation costs need to be considered. We study a procurement setting in which a company needs to purchase a number of products from a set of suppliers to satisfy customer demand. The suppliers offer total quantity discounts and transportation costs are based on truckload shipping rates. The goal is to select a set of suppliers so as to satisfy product demand at minimal total costs. The resulting optimization problem is strongly NP-hard. We develop integer programming based heuristics to solve the problem. Extensive computational experiments demonstrate the efficacy of the proposed heuristics and provide insight into the impact of instance characteristics on effective procurement strategies.

Public-private partnerships versus traditional procurement: Innovation incentives and information gathering

Abstract: A government agency wants a facility to be built and managed to provide a public service. Two different modes of provision are considered. In a public-private partnership, the tasks of building and managing are bundled, whereas under traditional procurement, these tasks are delegated to separate private contractors. The two provision modes differ in their incentives to innovate and to gather private information about future costs to adapt the service provision to changing circumstances. The government agency's preferred mode of provision depends on the information gathering costs, the costs of innovation efforts, and on the degree to which effort is contractible.