Production Capacity Planning with Market Share Expansion under Different Procurement StrategiesSidi Wu* and Hisashi Onari
Department of Industrial and Management Systems Engineering, Waseda University, Tokyo, Japan
- *Corresponding Author:
- Sidi Wu
Department of Industrial and Management Systems Engineering
Waseda University, Tokyo, Japan
Tel: (+81) 3-5286-3192
E-mail: [email protected]
Received Date: May 12, 2016; Accepted Date: May 24, 2016; Published Date: May 25, 2016
Citation: Wu S, Onari H (2016) Production Capacity Planning with Market Share Expansion under Different Procurement Strategies. Int J Econ Manag Sci 5:345. doi:10.4172/2162-6359.1000345
Copyright: © 2016 Wu S, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Market share expansion strategy is usually considered by the manufacturers who intend to achieve lower production cost to extend the surviving period in mature markets where intense price competition occurs frequently. This study will discuss one manufacturer who is producing mature stage products and supplying them to product market to serve the end users. In order to produce the products, it is necessary for the manufacturer to procure the key components of the products from the component market which is on its fast-growing stage with high price fluctuation. Spot procurement and SC procurement are to be compared to find out which is a better strategy to support the manufacturer in the decision-making of production capacity. Profit rate, deficit rate and market share rate are considered as the valuation index in this study.