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Publication - Dr Aydin Nassehi

    An analysis of premium payments as a mechanism for securing preferential service in cloud manufacturing

    Citation

    Ma, A, Nassehi, A & Snider, C, 2019, ‘An analysis of premium payments as a mechanism for securing preferential service in cloud manufacturing’. in: Peter Butala, Edvard Govekar, Rok Vrabič (eds) Procedia CIRP. Elsevier B.V., pp. 168-173

    Abstract

    Paying a premium in a cloud manufacturing free market environment will benefit a customer during steady state scenarios, however during disruption this benefit diminishes to zero; dependent on the degree of disruption. These customers will recover quicker from disruptions, but the returns are small compared to the relative increase in cost. A cloud manufacturing scenario without contracts or preferential supply acts as a free market, this significantly increases supply chain risk. The predominant mechanism available to mitigate supply chain risk is the willingness to pay a premium. Agent-based simulation modelling experiments investigated this scenario using an extension of anarchic manufacturing for scheduling and control. The experiments induced a disruptive demand-side step change in requirement mix of capabilities and volume demanded by all customers. One customer was willing to pay a significant premium to the others. The waiting time (non-operating time) was analysed as the benefit and indicator for supply chain performance. The job cost for the customer willing to pay a premium relative to other customers and the relative waiting time were analysed during steady state, disruption, and recovery periods.

    Full details in the University publications repository