Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 372648
Title Value chain management for commodities: a case study from the chemical industry
Author(s) Kannegiesser, M.; Günther, H.O.; Beek, P. van; Grunow, M.; Habla, C.
Source OR Spektrum 31 (2009)1. - ISSN 0171-6468 - p. 63 - 93.
DOI https://doi.org/10.1007/s00291-008-0124-9
Department(s) Management Studies
Operations Research and Logistics
MGS
Publication type Refereed Article in a scientific journal
Publication year 2009
Keyword(s) revenue management - optimization - procurement - strategies - airlines - networks - capacity - prices - market
Abstract We present a planning model for chemical commodities related to an industry case. Commodities are standard chemicals characterized by sales and supply volatility in volume and value. Increasing and volatile prices of crude oil-dependent raw materials require coordination of sales and supply decisions by volume and value throughout the value chain to ensure profitability. Contract and spot demand differentiation with volatile and uncertain spot prices, spot sales quantity flexibility, spot sales price¿quantity functions and variable raw material consumption rates in production are problem specifics to be considered. Existing chemical industry planning models are limited to production and distribution decisions to minimize costs or makespan. Demand-oriented models focus on uncertainty in demand quantities not in prices. We develop an integrated model to optimize profit by coordinating sales quantity, price and supply decisions throughout the value chain. A two-phase optimization approach supports robust planning ensuring minimum profitability even in case of worst-case spot sales price scenarios. Model evaluations with industry case data demonstrate the impact of elasticities, variable raw material consumption rates and price uncertainties on planned profit and volumes
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