A Generic, Multi-Period and Multi-Partner Cost Optimizing Model for Cloud-Based Supply Chain

Abstract

Cloud technology in a multi-enterprise, collaborative context is one of the most promising topics at IT-Supply Chain (SC) intersection. Cloud comes with well-proven advantages and cost savings; enabling collaboration and business intelligence. Cloud transition is still on-going with individual enterprise-level transitions. However, collaborative paradigm dictates that entire network well-being is to be considered over enterprise-level concerns. Thus, handling the transition of a single enterprise is not sufficient for strategic network leverage. Planning and managing across multiple enterprises is required, taking into consideration various cost items and budget constraints. In this study, a multi-period multi-partner cost-optimizing model is developed for network-level management of cloud transition for a SC. The model produces an optimal transition plan, indicating timing of the transition for each partner to obtain the maximum cost savings across network over a specified planning horizon. The model proposed is generic, flexible and customizable for different sectors/settings.