Procurement with Deterministic Costs
At the beginning of many manufacturing processes, semi-finished products are manufactured from raw materials. Customer demands and raw material markets represent the interfaces of supply chains. Prices paid in procurement markets and for manufacturing can highly influence tied-up capital and therefore the total cost of final goods and company's profit. Growing international demand even further increasing by the market entry of emerging nations recently pushed raw material prices to unknown levels (see Nestmann (2006)). Nowadays, raw material prices are responsible for an increasing portion of total procurement cost.
KeywordsOptimal Policy Adjoint Variable Inventory Holding Initial Inventory Adjoint Function
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