Sunday, May 27, 2007

Supply chain optimization tool for purchasing decisions in B2B construction marketplaces

Current developments on the design of B2B e-trading marketplaces are concentred on building robust architectures and framework, while the evaluation by practitioners and researches of mechanisms for optimizing purchashing decisions has not been properly addressed.
This paper addressed the purchase of constructions material as the last component in the supply chain, presenting a tool for optimization tool, the analytical capabilities of different entities in the B2B construction marketplace are improved, focusing on rebar as a typical construction material. Implications for current practices of rebar procurement are related to satisfaction of contractors and rebar supplier in terms of product price and specifications. Both buyers and sellers will have a tool that will alow them to successfully complete transactions, yhus getting the best arrangement in relation to price, delivery time and quantity of rebar material.
Several optimization model are analyzed with two input: amount paid (thousands of dollar) and lead time (days); and one output: weight (in tons). The supply chain optimization tool acts as a decision support system for analyzing past transactions in the marketplace in search of efficient transactions. It was demonstrated for the case of various transactions that, in order to make an efficient bid, the purchasing analyst could ask the supplier to shorten the delivery in obtain more tons of steel, and lower its price for the purposes of negotiating a better deal with current inefficient spot offers.
The research efforts in this area should focus on characterizing the optimization model to represent rebar in the context of a differentiated marketplace, not only limiting the envelope analysis to quantities of steel, delivery times and price. Curreant effort from the writers are well underway to incorporate categorical outputs such as bar size,grade,surface coating, and shape, often present in the rebar marketplace.


Sources : D.Castro-Lacouture , A.L. Medagalia, M. Skibniewski, 2006

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