This project will develop and analyze supply chain models to better understand the impact of collaboration on improving the efficiency and effectiveness of interactions between (potentially competitive) enterprises in supply chains. With a primary focus on collaborative procurement, the research goals of this project include the following: (1) Analyze the dynamics of horizontal inter-enterprise collaborative procurement. By studying the underlying economics behind collaborative procurement among competitor firms, the project will examine the effects of collaboration on buyer and supplier profitability, and derive conditions under which collaboration will be beneficial to each participant. (2) Develop models and decision support tools for coordinating intra-enterprise collaborative procurement with logistics, to simultaneously optimize the "net landed cost" across different functions of an enterprise. (3) Study how buyers should procure in the face of quantity discounts under demand uncertainty. The outcomes of this research will be used to develop and offer a variety of undergraduate and graduate courses covering the issues, and basic tools and concepts in collaborative supply chains, as well as to develop case studies based on research and industry experiences.
Overall, advances in these areas promise tremendously improved efficiencies in all stages of a supply chain. Intra- and inter-enterprise collaborative procurement would not only decrease the inefficiencies in the supply chain but also increase the social welfare. In industries like retailing, which represents about 40% of the economy, such improvements would be remarkable.
