P Company’s Supply Chain Cost Optimization Design Based On The Prediction Model Of Exchange Rate

With the advent of economic globalization, the competition between supplychains has gradually replaced the competition between the enterprises;Optimizing supply chain cost is a necessary strategic for obtaining thecompetition advantage of enterprise. Because of unstable factors in the worldeconomy and the European debt crisis, the exchange rate risk has become aproblem many enterprises had to face. P Company is a major producer of coaxialcable, which supplies OEM, ODM products and technical services for the globaltop500companies. There are some problems in the process of supply chainmanagement because P Company cannot predict the exchange rate trend: Rigidpurchasing method impacts the procurement cost, fixed purchasing number,excess inventory increases inventory cost, inflexible delivery way affects thelogistics cost.Combining actual conditions of P Company in the thesis, first of all predictthe exchange rate based on GARCH model is created. The model has highaccuracy and strong capacity of prediction from the results of model validation,which has certain applicability on the short-term exchange rate forecasting. Thenthe scheme of supply chain cost optimization in P Company based on the result ofexchange rate prediction is designed which including three parts: Optimizes thepurchasing date with the reorder point formula to reduce procurement costs;optimizes the purchasing quantity with EOQ model to reduce inventory cost;optimizes the delivery way with transshipment problem model to reduce logisticscost. Finally the design scheme is validated and the results show the purchasingcost, the inventory cost and the logistics cost for P Company are reducedapparently.The research is an extension of the supply chain cost control theory, and itcan provide effective theoretical guidance for P Company.