Status and Problem Analysis of Da-industrial Salt Supply Chains in China

Abstract

The traditional da-industrial salt supply chains in China cannot match supply and demand very well because of demand uncertainty, which causes huge losses to salt making enterprises and also inŽuences the performance of the whole supply chain. How to deal with the demand uncertainty to improve the performance of the supply chain is an important subject for the da-industrial salt supply chain. In this paper, we introduce the traditional da-industrial salt supply chains in China and analyse the main problems in the operation mode as follows. One problem is that the traditional operations mode in da-industrial salt supply chains impacts the performance of the whole supply chain. The other one is that the high demand uncertainty brings damage and huge losses to the supply chain. To solve these problems, we propose supply contracts with options in da-industrial salt supply chains in China. Purchasing options enables the salt using enterprise to gain Žexibility in the order decision-making, and to reduce forecasting error by further collecting demand information. For the salt making enterprise, she can be compensated from the revenue obtained from the options.