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A simulation model of a coordinated decentralized supply chain
Author(s) -
Cannella Salvatore,
LópezCampos Mónica,
Dominguez Roberto,
Ashayeri Jalal,
Miranda Pablo A.
Publication year - 2015
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/itor.12175
Subject(s) - supply chain , upstream (networking) , computer science , stockout , process (computing) , distortion (music) , reduction (mathematics) , mathematical optimization , operations research , downstream (manufacturing) , business , economics , operations management , mathematics , bandwidth (computing) , computer network , amplifier , geometry , marketing , operating system
This paper presents a simulation‐based study of a coordinated, decentralized linear supply chain (SC) system. In the proposed model, any supply tier considers its successors as part of its inventory system and generates replenishment orders on the basis of its partners’ operational information. We show that the proposed coordinated decision‐making process creates a reduction in information distortion along an SC compared with a traditional, noncoordinated strategy. A novel result is that we show how a coordinated SC can avoid the detrimental consequences of demand amplification in terms of penalty costs due to the stockout phenomenon in upstream stages.