Supplier relationship managers often find it difficult to evaluate and
optimize supplier relationships, which are crucial to the success of
their business yet complex and multifaceted, characterized by long-term
orientation, uncertainty, temporal evolution, idiosyncratic investment,
improvement potential, and adaptation flexibility. How to design optimal
supply contracts to govern supplier relationships has been a common
problem in business practice for many years. This book draws on the
modern theories of investment under uncertainty in the finance
literature and proposes a hierarchical, dynamic and value-based solution
for supplier relationship and supply contract management. At the
strategic level, the author addresses supplier relationship management
by putting forward a three-layer relationship valuation procedure and a
fuzzy-stochastic relationship valuation model. In addition, decision
models for managing a supplier relationship life cycle as well as
configuring and planning supplier relationship portfolios are presented.
At the tactical level, the author deals with supply contract management.
A general, compound supply contract model is proposed and how to design
optimal supply contracts under demand risk and price risk is explored.
Furthermore, the contract portfolio configuration problem is discussed.
