Supply Chain Collaboration Environment Procurement Decision-making Optimization Research

With the development of science、IT and logistics technology, customers’ demandtrend to be more diverse、customized and uncertain. Due to the increasingly fiercecompetition of the global market, business executives have to change the traditional modeof operation and decision-making in order to form a strategic alliance with otherinter-enterprises in the vertical integration supply chain. Therefore, the competitionbetween supply chains has become a hot issue in the contemporary economic environment.Materials procurement and replenishment process are undoubtedly the key part to formalliance relationship. Thus how to make decision to optimize the replenishment processwith the supplier by manufacturers is decisive for the cooperation between the upstreamand downstream enterprises of the supply chain, and even for the cost saving of wholesupply chain. This paper discusses the decision-making optimization of materialsreplenishment process between manufacturer and suppliers under collaborative supplychain management. The following aspects are mainly analyzed.First of all, build a basic replenishment decision-making model based on thetraditional economic order quantity (EOQ) model, and fully consider the cost structure ofthe supply chain which is constituted by suppliers and manufacturers to find the optimizedorder which meets the cost-optimized target. And then, add three constraints into the basicreplenishment decision-making model to find the new optimized order quantity. Theanalysis shows that this new optimized order is larger than the pre-optimized order whichconclude by the separate decision of the manufacturer. But if you consider the supply chainas a whole, this choice is better than the former one.Secondly, two new models are extended based on the basic replenishmentdecision-making model. One is replenishment decision-making model with considerationof the third-party logistics and the other is the order consolidation’ replenishmentdecision-making model. All of these models are going to find the optimized replenishmentdecision-making between suppliers and manufacturers. The difference is that the first onebased on one product and multi-suppliers, and the other one based on multi-products andone supplier. The production type of manufacturer also has effect on the finaldecision-making. This paper mainly analyses the material replenishment decision-makingoptimization problem in the made to order (MTO) mode.Finally, based on a large multinational medical device manufacturing enterprises’actual production conditions, the paper analyzes the problems and deficiencies of thecompany currently facing in the material replenishment process are analyzed. Then based on the application analysis of the optimal order quantity model, this paper gives someproposals to improve the material replenishment process of this enterprise.