A Queueing-Game Model for Making Decisions About Order Penetration Point in Supply Chain in Competitive Environment

2013 ◽  
Vol 4 (4) ◽  
pp. 1-24 ◽  
Author(s):  
Ebrahim Teimoury ◽  
Mahdi Fathi
Keyword(s):  
Supply Chain ◽  
Strategic Decision ◽  
Sensitivity Analyses ◽  
Buffer Size ◽  
Inventory Level ◽  
Game Model ◽  
Profit Function ◽  
Make To Order ◽  
Capacity Model ◽  
Make To Stock

This study is dedicated to Order Penetration Point (OPP) strategic decision making which is the boundary between Make-To-Order (MTO) and Make-To-Stock (MTS) policies. This paper considers two competing supply chains in which a manufacturer produces semi-finished items on a MTS basis for a retailer that will customize the items on a MTO basis. The two-echelon supply chain offers multi-product to a market comprised of homogenous customers who have different preferences and willingness to pay. The retailer wishes to determine the optimal OPP, the optimal semi-finished goods buffer size, and the price of the products. Moreover, the authors consider both integrated scenario (shared capacity model) and competition scenario (Stackelberg queueing-game model) in this paper. A matrix geometric method is utilized to evaluate various performance measures for this system and then, optimal solutions are obtained by enumeration techniques. The suggested queueing approach is based on a new perspective between the operation and marketing functions which captures the interactions between several factors including inventory level, price, OPP, and delivery lead time. Finally, parameter sensitivity analyses are carried out and the effect of demand on the profit function, the effect of prices ratio on completion rates ratio and buffer sizes ratio and the variations of profit function for different prices, completion percents, and buffer sizes are examined in both scenarios.

Managing supplier flexibility performance as a relational exchange investment in make-to-stock versus make-to-order production environments

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Divesh Ojha ◽  
Jeff Shockley ◽  
Pamela P. Rogers ◽  
Danielle Cooper ◽  
Pankaj C. Patel
Keyword(s):  
Supply Chain ◽  
Information Quality ◽  
Supply Chain Integration ◽  
Equation Modeling ◽  
Relational Exchange ◽  
Relative Importance ◽  
Content Type ◽  
Make To Order ◽  
Production Environments ◽  
Make To Stock

Purpose This paper aims to develop and test a model of buyer–supplier relational investment that links supply chain integration (SCI) to supplier flexibility performance (SFLEX) advantages in different manufacturing environments. Relational stability (RS) and information quality (IQL) are viewed as key indicators of intermediating commitment investments in supplier relationships to help support supplier accommodations for special requests for order flexibility. The model is applied to investigate the relative importance of manufacturer relational investments with suppliers in both make-to-stock (MTS) and make-to-order (MTO) production environments. Design/methodology/approach A survey of 206 US manufacturing firms was used to test the proposed research model using structural equation modeling and multiple-group analysis techniques. Findings Social exchange investments in relationship stability and information quality are found to fully mediate the positive performance relationship between supply chain integration and supplier flexibility performance for manufacturers. However, the relative importance of each form of investment in enhancing supplier flexibility performance varies based on the buyer’s (manufacturer’s) order fulfillment environment (make-to-stock versus make-to-order). Originality/value The proposed model may assist manufacturers make more informed relational exchange investments and supply chain configuration decisions that most conducive to enhancing supplier flexibility performance for different production environments.

Improving Supply Chain Delivery Performance Using Lean Six Sigma

2017 ◽  
pp. 958-980
Author(s):  
Alfred L. Guiffrida ◽  
Kelly O. Weeks ◽  
Lihua Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Six Sigma ◽  
Lean Six Sigma ◽  
Performance Model ◽  
Delivery Performance ◽  
Make To Order ◽  
Make To Stock ◽  
Delivery Models ◽  
Static Point

Models for evaluating and improving delivery performance play an important role in the management of supply chains. A review of supply chain delivery models that use Six Sigma methodologies indicate that the models are limited to only make-to-order supply chains where improvement in delivery performance occurs at a fixed (static) point in time. In this chapter, the authors present a generalized delivery performance model that overcomes these limitations. The model presented here can be used to measure delivery performance in both make-to-order and make-to-stock supply chains and supports improvement in delivery performance over a planned time horizon with definable milestones for attaining targeted levels of improvement. Numerical illustrations of the model are presented.

A Review on Strategic Positioning of Bottleneck around the Customer Order Decoupling Point and Issues on Production Planning in Supply Chain

2016 ◽  
Vol 16 (4) ◽  
pp. 243-254
Author(s):  
Muhammad Saeed ◽  
Samiya Loya ◽  
Adil Loya
Keyword(s):  
Supply Chain ◽  
Capacity Planning ◽  
Strategic Positioning ◽  
Shifting Bottleneck ◽  
Customer Order ◽  
Make To Order ◽  
Make To Stock ◽  
Engineer To Order ◽  
Operational Constraints ◽  
Specific Part

AbstractThe decoupling point separates part of the supply chain oriented towards customer orders from the part based on forecast planning. This paper focuses on identification of bottlenecks and their positioning with respect to customer order decoupling point (CODP) in supply chain continuum. The research is based on a conceptual model that separates engineer to order (ETO), make to order (MTO), assemble to order (ATO) and make to stock (MTS) by a decoupling point. The important feature of this paper is that supply, demand and operational constraints are allocated in specific part of the supply chain, making it more versatile. Shifting bottleneck concepts, including impact of bottleneck position and issues concerning production and capacity planning, are studied extensively to stabilize the supply chain and reduce its complexity.

Introduction to Supply Chain Management and Multimodal Logistics

2019 ◽  
pp. 1-28
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Chain Management ◽  
Cost Leadership ◽  
Make To Order ◽  
Leadership Strategy ◽  
Make To Stock ◽  
Engineer To Order ◽  
Focus Strategy ◽  
Cost Leadership Strategy

This chapter provides an understanding of basic essence of supply chain management. It introduces a multi-dimensional facet of supply chain management. A typical supply chain has at least three entities, that is, the supplier, the firm, and its customer. The inter-link between these three entities comprises three primary components of a supply chain, namely, the inbound or upstream supply chain, internal supply chain, and outbound or downstream supply chain. However, in a real-life scenario, many firms (especially in case of large and complex firms), the suppliers, and production centres are more than one. This increases the complexity of the supply chain structure. This concept has been introduced in this chapter. The drivers of supply chain have been categorized under strategic and operational drivers. This aspect has been explained, with examples. The chapter discusses the enablers and inhibitors of a supply chain of a firm. It proceeds to explain the issues in assessing and integrating the drivers, enablers, and inhibitors in the supply chain planning process. Bull whip and snow ball effects are two important outcomes of an inefficient supply chain. These concepts have been introduced here. Finally, the chapter concludes by laying down the objectives and the strategies of supply chain management. It prioritizes the focus of supply chain management, stating that customers come first followed by cost optimization. The chapter discusses on the ways to make supply chain agile and flexible. Supply chains are always prone to disruptions; hence, this chapter talks about a resilient supply chain. Next to customer, cost is an important element that enables a firm to keep its price competitive and be profitable. Here the concept of a lean supply chain has been discussed, a way to minimize waste and hence reduce cost. Supply chain management varies with firms' business strategy. The firm may choose to follow either a cost-leadership strategy or a differentiation or a focus strategy and thus would accordingly adopt push or pull or push-pull (supply chain) strategy. In case of cost-leadership strategy, the firm is expected to follow “make-to-stock” (operations) strategy; in case of differentiation strategy it would adopt “make-to-order” strategy; and for focus strategy the firm embraces “engineer-to-order” strategy. This chapter discusses these aspects to correlate the different dimensions of business and its supply chain management. Firms now are focussing on global operation to leverage on opening up of economy, enabling them to lower the cost of operations and achieve the desired quality. Besides, globalisation has also led to widening of market coverage. A brief introduction to global logistics management has been made in this chapter to emphasise on operationalization of a firms' global supply chain.

Demand Fluctuation and Supply Chain Integration: Case Studies of Japanese Firms

2017 ◽  
Vol 16 (5) ◽  
pp. 564-586
Author(s):  
Mizuki Kobayashi ◽  
Takahiro Tomino ◽  
Junjiro Shintaku ◽  
YoungWon Park
Keyword(s):  
Supply Chain ◽  
Case Studies ◽  
Manufacturing Firms ◽  
Marketing Channels ◽  
Supply Chain Integration ◽  
Japanese Firms ◽  
Make To Order ◽  
Make To Stock ◽  
And Control ◽  
Tremendous Challenge

Abstract Current Japanese oems utilize both make-to-stock (mts) and make-to-order (mto) to cope with demand fluctuation. In this article, we study how leading manufacturing firms utilize mts and mto by observing two case studies, Toyota’s and Omron’s operations in China. Production and delivery of component suppliers are based on the advance notification from their manufacturers. For this, most automotive firms integrate marketing channels internally, however, most healthcare firms do not. Consequently, it is difficult to forecast and control demand accurately like automotive firms. In this sense, for healthcare firms, it is a tremendous challenge to respond to demand fluctuation through integration with external marketing agencies. We show both companies strategies to mix mts and mto along with integrating internal and external parties.

Improving Supply Chain Delivery Performance Using Lean Six Sigma

2015 ◽  
pp. 89-117 ◽  
Author(s):  
Alfred L. Guiffrida ◽  
Kelly O. Weeks ◽  
Lihua Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Six Sigma ◽  
Lean Six Sigma ◽  
Performance Model ◽  
Delivery Performance ◽  
Make To Order ◽  
Make To Stock ◽  
Delivery Models ◽  
Static Point

Models for evaluating and improving delivery performance play an important role in the management of supply chains. A review of supply chain delivery models that use Six Sigma methodologies indicate that the models are limited to only make-to-order supply chains where improvement in delivery performance occurs at a fixed (static) point in time. In this chapter, the authors present a generalized delivery performance model that overcomes these limitations. The model presented here can be used to measure delivery performance in both make-to-order and make-to-stock supply chains and supports improvement in delivery performance over a planned time horizon with definable milestones for attaining targeted levels of improvement. Numerical illustrations of the model are presented.

scholarly journals Information Sharing in a Closed-Loop Supply Chain with Asymmetric Demand Forecasts

2017 ◽  
Vol 2017 ◽  
pp. 1-12 ◽  
Author(s):  
Pan Zhang ◽  
Zhongkai Xiong
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Closed Loop ◽  
Collection Efficiency ◽  
Demand Forecast ◽  
Closed Loop Supply Chain ◽  
Make To Order ◽  
Make To Stock ◽  
The Impact ◽  
Demand Forecasts

This paper studies the problem of sharing demand forecast information in a closed-loop supply chain with the manufacturer collecting and remanufacturing. We investigate two scenarios: the “make-to-order” scenario, in which the manufacturer schedules production based on the realized demand, and the “make-to-stock” scenario, in which the manufacturer schedules production before the demand is known. For each scenario, we find that it is possible for the retailer to share his forecast without incentives when the collection efficiency of the manufacturer is high. When the efficiency is moderate, information sharing can be realized by a bargaining mechanism, and when the efficiency is low, non-information sharing is a unique equilibrium. Moreover, the possibility of information sharing in the make-to-stock scenario is higher than that in the make-to-order scenario. In addition, we analyze the impact of demand forecasts’ characteristics on the value of information sharing in both scenarios.

Evolution of Trust in Business-to-Business E-Commerce

2011 ◽  
pp. 47-55
Author(s):  
Pauline Ratnasingham
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
The Internet ◽  
Chain Management ◽  
Distributed Information ◽  
Make To Order ◽  
Trading Partners ◽  
Make To Stock ◽  
Trust In Technology ◽  
Business To Business

E-commerce is defined as a means of conducting business electronically via online transactions among trading partners. Forrester Research predicted that B2B (business-to-business) e-commerce could be worth $5.7 trillion by the end of 2004. This study aims to examine the evolution of e-technologies and its impact on trust. Trust refers to reliance on and confidence in one’s business partner (Mayer, Davis, & Schoorman, 1995). We discuss the evolution of e-technologies in light of the evolution of trust in technology trust (or transactional trust) and relationship trust or (relational trust). Electronic data interchange (EDI) was the prominent technology used in the 1970s and ’80s. As we approached the 21st century and with the advent of the Internet, businesses feared that the lack of presence on the Internet would hinder their competitive and strategic advantages. Internet competition in most industries is forcing businesses to search for ways to improve product quality, customer service, and operation efficiency in supply chain management (SCM) in order to remain competitive. Today e-commerce has moved beyond EDI via value-added networks (VANs) by leveraging into the Internet and extending into Web technologies. The Internet is transforming and reshaping the nature of interorganizational commerce by enabling new types of interorganizational relationships. The business benefits include lower costs and more flexible systems that provide a facilitating structure for virtual relationships, enabling the easier identification of suppliers and products and more integrated supply chain management (Dai & Kaufmann, 2000). The Internet has impacted the SCM e-commerce environment by creating a centralized, global business and management strategy (e.g., make to order, assemble to order, and make to stock), and online real-time, distributed information processing to the desktop, thereby providing total supply-chain information visibility and the ability to manage information not only within firms, but also across firms and industries. On the other hand, uncertainties, technical complexities, and concerns about trust have kept many firms from participating actively in B2B e-commerce. Uncertainties reduce the confidence both in the reliability of online B2B transactions and more importantly in the trading parties themselves. In a survey of 60 procurement trading partners involved in supply chain management at U.S. firms conducted by New York-based Jupiter Media Metrix Inc. in 2001, the findings indicated that 45% of the trading partners suggest a lack of trust prevented them from buying goods and trading online more frequently. In the next section we discuss the evolution of e-technologies, followed by its role in supply chain management and impact on trust.

Evolution of Trust in Business-to-Business E-Commerce

2011 ◽  
pp. 495-501
Author(s):  
Pauline Ratnasingham
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
The Internet ◽  
Chain Management ◽  
Distributed Information ◽  
Make To Order ◽  
Trading Partners ◽  
Make To Stock ◽  
Trust In Technology ◽  
Business To Business

E-commerce is defined as a means of conducting business electronically via online transactions among trading partners. Forrester Research predicted that B2B (business-to-business) e-commerce could be worth $5.7 trillion by the end of 2004. This study aims to examine the evolution of e-technologies and its impact on trust. Trust refers to reliance on and confidence in one’s business partner (Mayer, Davis, & Schoorman, 1995). We discuss the evolution of e-technologies in light of the evolution of trust in technology trust (or transactional trust) and relationship trust or (relational trust). Electronic data interchange (EDI) was the prominent technology used in the 1970s and ’80s. As we approached the 21st century and with the advent of the Internet, businesses feared that the lack of presence on the Internet would hinder their competitive and strategic advantages. Internet competition in most industries is forcing businesses to search for ways to improve product quality, customer service, and operation efficiency in supply chain management (SCM) in order to remain competitive. Today e-commerce has moved beyond EDI via value-added networks (VANs) by leveraging into the Internet and extending into Web technologies. The Internet is transforming and reshaping the nature of interorganizational commerce by enabling new types of interorganizational relationships. The business benefits include lower costs and more flexible systems that provide a facilitating structure for virtual relationships, enabling the easier identification of suppliers and products and more integrated supply chain management (Dai & Kaufmann, 2000). The Internet has impacted the SCM e-commerce environment by creating a centralized, global business and management strategy (e.g., make to order, assemble to order, and make to stock), and online real-time, distributed information processing to the desktop, thereby providing total supply-chain information visibility and the ability to manage information not only within firms, but also across firms and industries. On the other hand, uncertainties, technical complexities, and concerns about trust have kept many firms from participating actively in B2B e-commerce. Uncertainties reduce the confidence both in the reliability of online B2B transactions and more importantly in the trading parties themselves. In a survey of 60 procurement trading partners involved in supply chain management at U.S. firms conducted by New York-based Jupiter Media Metrix Inc. in 2001, the findings indicated that 45% of the trading partners suggest a lack of trust prevented them from buying goods and trading online more frequently. In the next section we discuss the evolution of e-technologies, followed by its role in supply chain management and impact on trust.

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