Study On Purchasing Strategy Of Precious Metal Materials In Great Steel Enterprise Based Constraint CVAR

The production process of great steel enterprise needed to consume a lot of precious metal materials such as Ni, Cr. However, when purchasing materials, the steel enterprise had to face various risk including acute price fluctuation, wide variety, large purchasing fund and so on. The acute price fluctuation had the highest risk. Therefore, it had become more and more important for great steel enterprise to make out an optimal purchasing strategy which could reduce purchasing cost as well as controlling purchasing risk.To solve the problem caused by the strong fluctuation of material price, the most traditional ways mainly focused on purchasing cost optimization without taking risk control into consideration. However, those traditional ways had been proved impractical for decision maker to control risk during purchasing process. Therefore, a concept of alloy surcharge pricing mechanism was proposed which could avoid price fluctuation risk in some extend. Meanwhile, with the aim to jointly optimize purchasing cost and risk control, the CVaR (Conditional Value at Risk) theory was used to study the purchasing strategy of precious metal material. This theory had been widely and successfully used in financial fields.Firstly, time series theory was used to propose a price prediction method of precious metal material. Based on historical data, this method could predict the price in a few future periods. The results of the prediction were used as the input parameters. After analyzing the influencing factors of production price, an alloy surcharge pricing model was established, and then a fitting model was obtained based on the historical price data of steel production and precious metal. Then, in order to study the purchasing strategy of precious metal materials, an optimization model based on CVaR constraint was established. The model aimed to control cost and risk together. At last, an illustrative example was given to verify the CVaR-Model respectively based on the traditional product pricing mechanism and the alloy surcharge product pricing mechanism.The results of the research showed that it actually could optimizing the cost and risk jointly with the application of CVaR theory in the field of precious metals purchasing. The CVaR model proposed could help great enterprise make out perfect purchasing strategies. And, it also showed that on the condition of same risk tolerance and risk attitude, the risk of the optimizing purchasing scheme based on alloy surcharging price mechanism was lower than the risk based on traditional price mechanism. That meant the proposed model could indeed avoid risk caused by serious price fluctuation in some extend through implementing alloy surcharge pricing method. Therefore, the proposed model had been accepted and applied to the practical purchasing processes of precious metal materials purchasing widely by some great enterprises.