A simulation model of a coordinated decentralized supply chain

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 s...

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Bibliographic Details
Published in:International transactions in operational research 2015-07, Vol.22 (4), p.735-756
Main Authors: Cannella, Salvatore, López-Campos, Mónica, Dominguez, Roberto, Ashayeri, Jalal, Miranda, Pablo A.
Format: Article
Language:English
Subjects:
coordinated order policies
decentralized supply chain
information sharing
Inventory control
Operations research
Simulation
Studies
Supply chain management
Supply chains
system dynamics
system service level
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Summary: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.
ISSN:0969-6016
1475-3995
DOI:10.1111/itor.12175