Abstract
This study focuses on the multi-period procurement planning with multiple sourcing options under uncertain demands and uncertain purchase prices. We model the problem as a mixed integer programming considering multiple scenarios and its objective is to minimize the expected total cost. The sourcing options involve in this study including long-term contracts, option contracts, flexible contracts, and spot market. In general, long-term contracts provide the lowest purchase price but it is less flexible and purchase quantity is higher than other sourcing options. The prices of option contracts and flexible contracts are higher than long-term contracts but those are more flexible than long-term contracts. The purchase prices in spot market changes with the market demands. Normally, the prices in spot market are higher than other sourcing options but in some rare case it may be the lowest options. In our numerical experiment, we solve the problems under different conditions and investigate how the purchase quantity of each sourcing options changes. The numerical experiments indicate that the model efficiently purchase different type sourcing options to minimize the total purchase cost.