Evaluating the Offered Price of Suppliers in Non-Spot Contracts Based on Their Behavior Analytics (Case Study: Faratarh Steel Company)

One of the challenges in non-spot contracts is evaluating the price the trading party (supplier) offers. His past behavior in the way of exchanging the traded goods as well as in the way of the financial settlement of the concluded contract plays a key role in the evaluation of his proposed price. This research has been done with the aim of solving this challenge. First, using historical data, the behavior of strategic suppliers of a steel trading company has been investigated and their behavior has been categorized into specific patterns. Then, a formula is presented that relates the proposed non-spot price and the cash market price in each pattern. Besides evaluating the proposed price using the presented method, how to use it as a decision support tool for pricing in non-spot contracts is explained. Moreover, by example, it is stated how to use this method in order to predict the future price more precisely. Sensitivity analysis is performed on the main parameters and the results are illustrated. This work provides a tool to evaluate and determine the price in non-spot contracts based on the historical behavior of the trading party. In addition, it can be used to predict future prices more accurately.