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An analysis of premium payments as a mechanism for securing preferential service in cloud manufacturing

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Original languageEnglish
Title of host publicationProcedia CIRP
EditorsPeter Butala, Edvard Govekar, Rok Vrabič
Publisher or commissioning bodyElsevier B.V.
Number of pages6
DateAccepted/In press - 31 Oct 2018
DatePublished (current) - 24 Jun 2019
Event52nd CIRP Conference on Manufacturing Systems, CMS 2019 - Ljubljana, Slovenia
Duration: 12 Jun 201914 Jun 2019

Publication series

NameProcedia CIRP
ISSN (Print)2212-8271


Conference52nd CIRP Conference on Manufacturing Systems, CMS 2019


Paying a premium in a cloud manufacturing free market environment will benefit a customer during steady state scenarios, however during disruption this benefit diminishes to zero; dependent on the degree of disruption. These customers will recover quicker from disruptions, but the returns are small compared to the relative increase in cost. A cloud manufacturing scenario without contracts or preferential supply acts as a free market, this significantly increases supply chain risk. The predominant mechanism available to mitigate supply chain risk is the willingness to pay a premium. Agent-based simulation modelling experiments investigated this scenario using an extension of anarchic manufacturing for scheduling and control. The experiments induced a disruptive demand-side step change in requirement mix of capabilities and volume demanded by all customers. One customer was willing to pay a significant premium to the others. The waiting time (non-operating time) was analysed as the benefit and indicator for supply chain performance. The job cost for the customer willing to pay a premium relative to other customers and the relative waiting time were analysed during steady state, disruption, and recovery periods.

    Research areas

  • Agent-based simulation, Cloud manufacturing, Scheduling and control


52nd CIRP Conference on Manufacturing Systems, CMS 2019

Duration12 Jun 201914 Jun 2019

Event: Conference

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    Rights statement: This is the final published version of the article (version of record). It first appeared online via Elsevier at Please refer to any applicable terms of use of the publisher.

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    Licence: CC BY-NC


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