Article
An exploration of factors influencing the choice of commodity price risk mitigation strategies
Journal of Purchasing and Supply Management
(2017)
Abstract
Most firms are exposed to price volatility associated with commodities, which can significantly affect the price paid for raw materials, energy, packaging, shipping, and component purchases. Commodity price risk represents the financial, operational and informational effects of commodity price volatility (CPV). The purpose of this paper is to contribute to the supply chain risk management literature by providing a taxonomy of commodity price risk mitigation strategies and factors that may influence the adoption of these strategies. A qualitative study was conducted using a grounded theory approach, based on case studies of companies with home operations in Italy, Germany, and the US. The paper provides some initial evidence for theory and practice as to: 1) how firms can mitigate the risk from CPV by implementing various sourcing, contracting, and financing strategies; and 2) the influence of commodity/product factors, buying organization factors, supply chain factors, and external environment factors on strategy capability and choice.
Keywords
- Commodity price volatility,
- Supply riskRisk mitigation strategies,
- Qualitative research,
- Grounded theory
Publication Date
January 1, 2017
DOI
10.1016/j.pursup.2017.01.004
Citation Information
Barbara Gaudenzi, George A. Zsidisin, Janet L. Hartley and Lutz Kaufmann. "An exploration of factors influencing the choice of commodity price risk mitigation strategies" Journal of Purchasing and Supply Management Vol. 24 Iss. 3 (2017) p. 218 - 237 Available at: http://works.bepress.com/george-zsidisin/2/