Optimal processing, blending and trading of a commodity with multiple grades and random supply

Publication Date

1-1-2018

Keywords

Optimal processing, Commodity, Supply chain management

Conference

In this paper, we consider a trader that purchases a raw commodity, processes it into multiple grades of another commodity, purifies and blends the processed inventory to get the desired mix, and sells the resulting mix in spot market. We develop a model to obtain insights on processing, purification, blending, and selling decisions.

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