A supply chain (SC) is a network of organizations containing suppliers, manufacturers, distributors, wholesalers, and retailers. Each of these components plays its specific role in operations and production to supply needed products and required services to the end consumers.
Each entity in this chain seeks its own benefits which can be obtained with or without collaboration with other chain entities. Depending on how decisions are made, there exist two major types of SCs. When each entity of SC only considers its own objectives and constraints, the SC is locally optimized and this is called a decentralized control mode. Nonetheless, when a single decision maker determines its decision policy with consideration of objectives and constraints of the entire entities in the SC, it is called a centralized control mode (Simchi-Levi et al. 1999). Achieved decision policy in the centralized mode may not be optimal for each entity; however, it is optimal for the whole SC. Furthermore, the centralized control mode can also be adopted under special configurations. For example, vendor-managed inventory (VMI) is a setting in which the centralized control mode should be used.
The replenishment policy of each facility in the SC is mostly determined at the tactical stage for periods ahead and decision makers should decide upon when and how much to order and/or produce for each entity to provide their customers with a proper service level. In an uncertain environment, replenishment planning will be more complex where there is not sufficient information about the parameters related to other chain’s entities. Sometimes, these entities become involved in different kinds of contracts to coordinate with each other. It reduces risk in a stochastic situ...
... middle of paper ...
...imal solution. Then, a simulation method is developed to compare the centralized and decentralized SCs. In addition, to reach the near optimal solution in the centralized model, evolution strategy (ES) algorithm and imperialist competitive algorithm (ICA) as meta-heuristic approaches are applied.
The remainder of this paper is organized as follows: In Section 2, a literature review on inventory systems in the area of SC is represented. Sections 3 and 4 are assigned to define the problem and also present the respective mathematical models. In Section 5, a scenario generation technique is described to deal with demand uncertainty in multiple periods. In Section 6, solution methods are developed to solve the centralized model. In Section 7, computational results of a numerical example are presented. Finally, Section 8 contains conclusions and future research directions.
On many occasions, Apple Inc. has been voted to boast the most efficient supply chain in the world. By leveraging wealth and pure business strength, Apple has been able to construct a supply chain that is both efficient and highly profitable. While much of this supply chain construction has come from great investing and business decisions by Steve Jobs and Tim Cook, it has come at the cost of many factory workers’ well being overseas. Overall, the construction of the highly organized supply chain has given Apple a competitive advantage over the rest of the market.
Verizon is predominantly a cellular service provider; however, they are involved in many more industries like search engines, news outlet, and emails with the acquisitions Yahoo and AOL. Thus, the supply chain Verizon utilizes involves many inputs were there are always many choices, because of the high rivalry and cost cutting demands from consumers. According to Verizon, “Verizon is a charter member of the Billion Dollar Roundtable, a coalition of corporations that spend more than $1 billion each year with diverse suppliers.” (www.verizon.com/about/our-company/supplier-diversity). The primary supplier for Verizon would be their phone providers, which include Apple, Google Android phones, Microsoft, Blackberry, etc. The
If we draw a parallel between the Army Problem Solving Model (Process) and the Rapid Decision Making and Synchronization Process, which are in basic different methods, we can see a lot of similarities and equivalences.
The research questions being proposed in this paper include but are not limited the following
In this paper, I summarize the article and identify relevant information and any changes that may have occurred since the publication of this article. I will also offer comments and aspects pertaining to material provided.
Food industry can be chartered by low margin industry, while along with the shift of power from the manufacturer to the purchaser, the price and demand became flexible, and the product variety increased.
The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
With a thorough situation analysis of the internal environment versus external environment and a SWOT matrix, a set of organizational objectives is created for the company to retrieve best result in resolving the issues and problems.
Target Corporation needs to increase product availability based on the customer needs using a forecasting and supply chain
The slides for the presentation that accompany this paper can be found in the appendices.
Sethi, S, Yan, H, & Zhang, H. (2005) Inventory And Supply Chain Management With Forecast Updates New York, NY : Springer.
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
KLI could try a similar approach and have suppliers use the just-in-time (JIT) inventory system and keep levels high enough to sell out of products, but low enough to use residual space available.
The incentive issues in VMI contractual agreements are also studied in VMI literature. Fry, apuscinski and Olsen (2001) model a specific (z,Z)-type of VMI agreement in a supply chain environment with a single manufacturer and a single retailer with stochastic demand and compare the VMI system with a traditional case under full information sharing. In this type of contract, the retailer sets the inventory levels, z and Z, that represent the lowest and highest inventory levels, respectively. The manufacturer should keep the retailer’s inventory level between these specified levels. The manufacturer follows a fixed production schedule, but can replenish the retailer in any period and she incurs a penalty cost if she cannot keep the retailer’s
AIS covers many parts of the value chain and implying both to Supply chain management system, Customer relationship management system and Enterprise Resource planning system (www.youtube.com/watch?v=7wL6x1BSlw8, 2016)