The Research On Application Of Portfolio Management Theory In Avoidance Of Supply Chain Procurement Risk

Portfolio management theory is applied to the field of venture capital at first, which was proposed by American economist Harry Markowitz in 1952. Although this theory derives from portfolio risk management, it is of universal significance which can be applied to human beings in all aspects of the social system, so it can also be applied in the supply chain to avoid the risk of procurement, which is studied in this thesis. The thesis consists of three parts as follows:Part one summarizes the literature, and focuses on the trends, the position and role of the procurement in the supply chain, the definition and sources of the procurement risk, and the achievements of procurement risk management at home and abroad. Then in the end of this part, we give the definition of supply chain procurement risk, point out that the risk derives from the supply and market volatility risk, and then analysis the feasibility of portfolio management in the avoidance of procurement risk.Part two is the most important one. To avoid the supply risk and improve supply chain flexibility, we purchase strategic material from multi-suppliers. Given the number of the suppliers, we study how to allocate the quantity from different suppliers to realize the balance between lowering costs and risk of procurement. Through establishing procurement decision model, we prove that the application of portfolio management to the supply risk is feasible and effective; at the same time, we use example to prove it. In the end of this part, we point out how to select and evaluate suppliers. To avoid the price volatility, we use the strategy of futures portfolio hedging to improve the efficiency. By establishing theoretical model, we present the optimal solution to calculate the number of futures contracts. Because of the limitations of the futures market, this thesis puts forward long-term electronic trading market to expand the scope of hedging, at the end of this part, we study how the enterprises should do.Part three is the conclusion. It summarizes the thesis and points out the insufficiency and future expectation.