|
Education
Ph.D.
Candidate, Management Science and Engineering, Stanford
University
M.S.,
Engineering Economic Systems and Operations Research,
Stanford University (1998)
B.S.,
Industrial Engineering and Operations Research, U.C.
Berkeley (1996)
Research
Real
Options in Material Procurement Contracts
This
research examines how real options could be constructed
in material procurement contracts in the construction
industry. The optimal policy of how (if and when) to
exercise the real options can then be turned into supply
chain decision support software. Real options can provide
buyers with valuable operating flexibility to minimize
inventory cost and price volatility. It can also help
suppliers diversify their price risks and smooth out
production schedule. Therefore, this concept has a large
potential in the construction industry to increase profit
margin for many parties along the supply chain by minimizing
wastes and increasing efficiency.
We
identify three major problems that would have to be
overcome:
Identify
the types of materials and the types of real options
to embed into the procurement contracts of these materials.
Reduce
the number of dimensions in sequential decision problems
to make calculation feasible.
Propose
incentives for buyers and sellers to change the current
way of doing business.
Contact
Information
CIFE
Stanford University
Stanford, California 94305-4020
Phone:
(650) 725-8970
Fax: (650) 723-4806
Email:
franthng@stanford.edu
|
