DD Traders: Sourcing for DEMDACO
(4 pages of text)
DD Traders was the Asian branch of DEMDACO, a privately held company that wholesaled unique gift products that were marketed and distributed to the specialty retail channel in the United States and some international markets. Carolyn Glasow recognized an opportunity to leverage a quantitative approach to sourcing future allocations across vendors that would also improve the short-term demand transparency that was provided to the company’s key business partners, which could in turn lead to increased bargaining power for price negotiations and production lead times. This was a recurring issue for Glasow and her sourcing team: how should she allocate product purchases among the various manufacturers that bid for the opportunity to supply products to DD Traders?
The case provides an example of integer programming for selecting suppliers to source products. Key concepts include simultaneous decision problems, optimization, and procurement auctions.
China, Medium, 2011
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