Generalizable simulation framework for the request-to-order process in the procurement of onboard vessel requisitions

2025-05-03

AI Summary

Maritime logistics procurement faces a cost–compliance trade-off due to demand uncertainty and volatile spot markets. Method: This paper develops a generic discrete-event simulation (DES) framework for underway shipboard procurement, comprehensively modeling requisition generation, processing, and order allocation. It innovatively integrates contractual rigidity constraints with spot-market opportunity costs and introduces an adaptive supplier allocation logic. Strategy comparison experiments and sensitivity analyses quantify the cost–compliance trade-off. Results: Dynamic strategies significantly reduce total procurement cost but degrade on-time fulfillment rates. When spot prices exhibit high sensitivity to order volume, both static and dynamic strategies over-rely on contractual supply; thus, increasing the contractual commitment ratio is recommended. The framework demonstrates strong cross-scenario generalizability, supporting adaptation to diverse maritime operational contexts and procurement policies.

Technology Category

• Search and Optimization: Mixed Discrete/Continuous Search
• Planning, Routing, and Scheduling: Scheduling under Uncertainty
• Game Theory and Economic Paradigms: Auctions and Market-Based Systems

Application Category

• Economics, Online Markets and Human Computation: Uses of LLMs and GenAI for marketplace design, bidding, and strategic interactions
• Graph Algorithms and Modeling for the Web: Efficient manipulation of static and dynamic Web-related graphs
• User Modeling, Personalization and Recommendation: User modeling and simulation for interactive and conversational systems

Abstract

Procurement in maritime logistics faces challenges due to uncertainties in demand and fluctuating market conditions. To address these complexities, we introduce a flexible discrete-event simulation framework that models the request-to-order process. This framework captures critical stages, including the generation of onboard vessel requisitions, requisition handling, and order allocation. Through numerical analysis, we compare two order allocation policies: a naive practice, which relies heavily on contracts, and a dynamic supplier selection approach that explores cost opportunities in the spot market. Our findings reveal trade-offs between cost efficiency and contract compliance, particularly in meeting volume commitments to contracted suppliers. Excessive reliance on spot market opportunities can yield significant savings but at the expense of contract compliance. Additionally, when spot rates are highly sensitive to order quantities, both policies tend to overutilize contracts, highlighting the need for larger volume commitments in such cases. These results offer actionable insights for improving procurement practices, while the framework's adaptability makes it a powerful decision-support tool across diverse procurement contexts.

Problem

• Modeling request-to-order process in maritime procurement
• Comparing contract-based vs dynamic supplier allocation policies
• Balancing cost efficiency with contract compliance challenges

Innovation

• Flexible discrete-event simulation framework models procurement
• Compares naive contract-based and dynamic supplier selection policies
• Analyzes trade-offs between cost efficiency and contract compliance