The impact of supply chain visibility when lead time is random

Authors:
Ek Peng Chew;Loo Hay Lee;Chee-Khian Sim
Affiliations:
Department of Industrial and Systems Engineering, National University of Singapore, Singapore, Singapore 117576;Department of Industrial and Systems Engineering, National University of Singapore, Singapore, Singapore 117576;Department of Applied Mathematics, The Hong Kong Polytechnic University, Kowloon, Hong Kong
Venue:
OR Spectrum
Year:
2013

Citing 7
Cited 0

A note on the dynamic lot-size model with uncertainty in demand and supply processes

Management Science
The effect of leadtime uncertainty in a simple stochastic inventory model

Management Science
Optimization of(s, S) inventory systems with random lead times and a service level constraint

Management Science
An Inventory Model with Order Crossover

Operations Research
Supply Chain Inventory Management and the Value of Shared Information

Management Science
Improved Base-Stock Approximations for Independent Stochastic Lead Times with Order Crossover

Manufacturing & Service Operations Management
Lost-Sales Problems with Stochastic Lead Times: Convexity Results for Base-Stock Policies

Operations Research

Quantified Score

Hi-index	0.00

Visualization

Abstract

We study the impact of supply chain visibility on periodic review inventory control, by studying its effect on lead time, where lead time is assumed to be random. We break down the total lead time from a supplier to a retailer into individual smaller lead times, as the product is tracked moving from one intermediary location to another. (This can be achieved, for example, through the use of RFID technology.) Under optimality, we observe that the average expected cost per cycle that the retailer can achieve in the long run given supply chain visibility is no worse than that for the base periodic review model without such visibility. An example is given which shows that there is indeed cost savings in the former, as compared with the base model. Further numerical results are then given to quantify the benefits of supply chain visibility on retailer's cost with defined simple lead-time distributions. We also report on any trends that might appear as input parameters are varied in the numerical experiments.