Research On Joint Decisions Of Dual Sourcing And Marketing Mix Strategies

This thesis studies the joint decision of dual sourcing and marketing mix strategies for a single product of one type of large state-owned trading enterprises, which have been granted the import and export rights. The underlying trading enterprises procure the commodities from nonferrous metals to crude oil from the oversea market and sell them in the domestic market to make profit. The production and sale of the commodities in the market abroad is perfectly competitive, of which the prices and outputs are always fluctuating. Trading enterprises'sourcing costs and amounts are consequently affected. However, relying on their monopoly positions in the domestic market, trading enterprises can make use of marketing mix tools to impact the domestic demands directly. This thesis are organized following the main thread of joint decision of dual sourcing and marketing mix strategies (pricing and non-price promotion) to covering four subjects sequentially.First of all, two factor pricing model is introduced to depict the stochastic prices of commodities from spot and futures market that allow no risk–free arbitrage opportunities. Based upon this stochastic price model, the basic model of joint decision of dual sourcing and pricing strategies is initially established. The trading enterprise need to find its optimal strategy to maximize the overall profit over the planning horizon. The optimal procurement and pricing policies for this problem are developed, which captures the characteristics of both the base-stock policy and the threshold policy. The order-up-to level and threshold are determined term structure of futures prices at market and the cost structure of the company. An extension to this basic model is thereafter made to explore the joint decision of dual sourcing and pricing strategies when the supply from spot market is uncertain, in which we use random variables to describe the maximum supplying capability of the spot market. In this situation, the optimal strategies are related to the starting inventory status at each period and the strategies'structure is far more complicated. When the supply from spot market is uncertain, the company tends to decrease its sourcing amount from spot market and increase selling price to handle the supplying uncertainty. The more fluctuating, the more conservative company tends to be, i.e. the lower its sourcing amount from spot market and the higher its selling price.The other half this research focuses on the joint decision of dual sourcing and non-price promotion. The basic model is initially constructed without considering the supplying uncertain in terms of supplying amount, which is followed by a model taking the supplying uncertain from spot market into consideration. Although the solution to these models still posses the structural characteristics of both base-stock policy and threshold policy, the optimal strategies are different from those of the joint decision of dual sourcing and pricing problem resulting from the uniqueness in the cost structure of non-price promotion and demand response function.