Opportunistic Scheduling and Pricing Strategies for Automated Contracting in Supply Chains

Abstract

Supply chains form an integral cornerstone of the daily operations of today’s business enterprises. The effectiveness of the processes underlying the supply chain determine the steady-flow of raw material and finished products between entities in the marketplace. Electronic institutions facilitate free and fair competition between providers and suppliers vying for contracts from customers and manufacturers. We assume that contracts are awarded via competitive auction-based protocols. We believe that the efficiency of the scheduling and pricing strategies of the suppliers play an important role in their profitability in such a competitive supply chain. The suppliers can decide their scheduling strategy for completing the contracted tasks depending on their capacity, the nature of the contracts, the profit margins and other commitments and expectations about future contracts. Such decision mechanisms can incorporate task features including length of the task, priority of the task, scheduling windows, estimated future load, and profit margins. Robust, opportunistic task scheduling strategies can significantly improve the competitiveness of suppliers by identifying market niches and strategically positioning available resources to exploit such opportunities. Effective price adjustment mechanisms are also required to maximally exploit such market opportunities.