Recently, Professor Xing Wei collaborated with Professor Liu Liming from Southern University of Science and Technology, Professor Fuqiang Zhang from Washington University in St. Louis, and Researcher Zhao Qian from the University of Modena and Reggio Emilia to publish a research article titled “The Bright Side of Price Volatility in Global Commodity Procurement” in Management Science, a top-tier journal in the field of management. Professor Xing is the first author, and China University of Petroleum (East China) is listed as the first affiliation.
The paper addresses the critical challenge of pricing strategies in global commodity procurement amid increasing price volatility. Taking the iron ore trade as an example, it analyzes the transition from fixed-price contracts (set before the delivery period) to contingent-price contracts (based on index prices at the time of delivery) that began around 2009. The paper provides theoretical insights into how importers should navigate between these two pricing mechanisms, a topic of high interest in both academia and industry.
By establishing a game-theoretic model, the authors demonstrate that price volatility, often seen as a risk factor, can in fact be strategically leveraged to benefit firms. This research offers theoretical support for pricing mechanism design in the procurement of commodities such as iron ore, crude oil, and soybeans. Additionally, the study pioneers an operations management framework based on two-dimensional information updates, contributing to the development of data-driven decision-making models in global supply chain management.
Management Science, founded in 1954 and published by the Institute for Operations Research and the Management Sciences (INFORMS), is widely recognized as one of the world’s leading journals in management research. It ranks first among management science journals in the UTD24 list and is one of the 50 journals included in the Financial Times’ FT50 ranking for business schools.
