Seventeen. Procurement Risk Management in Beef Supply Chains

  1. Panos Kouvelis3,
  2. Lingxiu Dong3,
  3. Onur Boyabatli4 and
  4. Rong Li4
  1. Onur Boyabatli4,
  2. Paul R. Kleindorfer1 and
  3. Stephen R. Koontz2

Published Online: 11 OCT 2011

DOI: 10.1002/9781118115800.ch17

The Handbook of Integrated Risk Management in Global Supply Chains

The Handbook of Integrated Risk Management in Global Supply Chains

How to Cite

Boyabatli, O., Kleindorfer, P. R. and Koontz, S. R. (2011) Procurement Risk Management in Beef Supply Chains, in The Handbook of Integrated Risk Management in Global Supply Chains (eds P. Kouvelis, L. Dong, O. Boyabatli and R. Li), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118115800.ch17

Editor Information

  1. 3

    Olin Business School, Washington University, St. Louis, Missouri, USA

  2. 4

    Lee Kong Chian School of Business, Singapore Management University, Singapore

Author Information

  1. 1

    Paul Dubrule Professor of Sustainable Development, INSEAD, Fontainebleau, France

  2. 2

    Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, Colorado, USA

  3. 4

    Lee Kong Chian School of Business, Singapore Management University, Singapore

Publication History

  1. Published Online: 11 OCT 2011
  2. Published Print: 4 NOV 2011

ISBN Information

Print ISBN: 9780470535127

Online ISBN: 9781118115800

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Keywords:

  • beef supply chains;
  • contract markets;
  • GIPSA Report;
  • procurement risk management

Summary

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 integrated risk management of input and output risks for the central player in the beef supply chains, the packer. The chapter also provides numerical simulations to illustrate the comparative statics of model results for processing, product market, and spot market parameters of interest.

Controlled Vocabulary Terms

Cash market; procurement; Risk management; supply chain