Price sensitivity in multi-level assembly systems: Case study of spanish baby food company

The current economic crisis, together with climate changes and exponential growth of the world population, is reflected in volatile prices of agricultural products. Prices are also strongly connected with the quality of agricultural products, which largely affect food production business in all aspects. Extended Material Requirements Planning (EMRP) Theory has proved to be capable of thoroughly analyzing entire supply chains. Price vector plays a crucial role in Net Present Value calculation, which gives us a strong background for financial evaluation of investment decisions. In this paper, we show the importance of ingredients' prices and quality in multi-level assembly systems on a real case study of a Spanish baby food company, using the principles of well-developed EMRP Theory.