Commodity Procurement with Operational and Financial Instruments (Softcover)

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The recent economic developments have strongly increased the interest in altering raw material prices and especially in the protection from volatile and increasing prices. 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.

1. 1Motivation Increasingglobalcompetitionandcostpressureforceenterprisesandsupplychains to discover undetected cost-saving potentials. In particular, interfaces to the p- curement market are a promising ?eld for improvement. Recent developments in international trade outline the high in?uence of uncertain deliveries and highly volatile prices on the companies¿ costs. A vital question in research, industry, and politics addresses theoptimal procurement policy of rawmaterialsdue touncertain future prices and is of highest priority for the ?rms¿ success and even the wealth of a nation. Nowadays, commodity markets and commodity derivative markets offer transparent, fast, and ef?cient trade and risk sharing for raw materials and ?nancial products on raw material prices, e. g. , option contracts. This coexistence of op- ational and ?nancial procurement instruments, i. e. , buying opportunities on spot and derivative markets, offers an auspicious chance to optimize the procurement policy in the crucial problem of raw material procurement which is the focus of this thesis. The most basic distinction of commodities is between storable and non-storable commodities (see Pirrong (2008)). The vast majority of commodities is storable, mainly at some costs, but this class is fairly heterogeneous. Commodities can be characterized by seasonality in demand (such as crude oil or natural gas) or production (take wheat or sugar as example) or contrarily by a rather continuous production and consumption (e. g. , nickel and aluminum).

Dr. Jan Arnold completed his doctoral thesis under the supervision of Prof. Dr. Stefan Minner at the Chair of Business Administration and Logistics at the University of Mannheim. He works as a management consultant.

Dr. Jan Arnold completed his doctoral thesis under the supervision of Prof. Dr. Stefan Minner at the Chair of Business Administration and Logistics at the University of Mannheim. He works as a management consultant.