Supply chain management application to B2B e-commerce

Abstract

In this thesis, a novel B2B E-commerce business model and its mathematical models applying supply chain management approach cost are proposed. The business model is tailored to consider total procurement cost which includes not only product cost but also transportation cost. Because of consideration of the total procurement cost, the business model needs mathematical models to find out the optimum Procurement solution among infinite combinations of supply chain networks and product allocations. A novel disjunctive programming technique, named $\varepsilon-convex$ hull in this thesis, is used for handling disjunctive nature of the problem. The ultimately developed mathematical model enables the business to include negotiation functions between partners. A simple example is tested to illustrate the capabilities of the proposed mathematical models, and it is extended to a large scale eProcurement problem concerning 14 suppliers and 5 transporters with discrete cost reduction. The results and computation time of the eProcurement problem indicate that online application of the business model and mathematical models is possible by incorporating the models with database and web programming.