Procurement Strategy for Electric Power Companies With Demand Signal Updating Under Supply-Demand Uncertainty

Electric power companies face uncertainties in both supply and demand during the procurement of electrical materials. Supply uncertainty is derived from unpredictable delivery quantities from suppliers and material quality inspection failures, and demand uncertainty is derived from the lead time, as the exact demand is not known at the time of placing the order, but the demand information is updated over time. Based on two ordering opportunities provided by the supplier, the decision on whether to place a second order is made based on the judgement of the acquired demand signals between the two ordering periods. This paper constructs a demand information updating model based on Bayesian theory to mathematically represent the demand information update and determine the threshold for demand signal updates, categorizing demand signals into high and low demand signals. Based on the judgment of demand information updating, a two-stage ordering model for the electric power company is constructed, providing the optimal first ordering strategy and the optimal second ordering strategy after assessing the demand signals, along with a sensitivity analysis of the demand signal threshold judgment and the system parameters for the two orderings. Numerical and case analysis indicates that the demand signal threshold decreases with increasing inventory costs and material ordering prices, and increases with rising shortage costs and coefficient of variation. Furthermore, conducting a second order after assessing the demand signal can reduce costs and enhance service levels.