Business Commons^™

Procurement Risk Management In Beef Supply Chains, Onur Boyabatli, Paul R. Kleindorfer, Steve R. Koontz

Research Collection Lee Kong Chian School Of Business

This chapter develops the theoretical model and provides the optimal solution for the procurement portfolio of the packer. It describes the computational results for the above model based on data for the U.S. beef industry described in the GIPSA Report, and complemented by industry demand and supply studies. The chapter determines the impact on the optimal procurement portfolio of spot price and demand uncertainty, the degree of substitution between products in final markets, as well as the cost characteristics of the packer and the nature of quality and cost differences in the contract and spot markets. It provides insights about …