Abstract
We developed a decision support framework for a global manufacturer of specialty chemicals to study the relative impact of demand, supply and lead-time uncertainties on cost and customer service performance. Our approach combines optimisation and simulation methodologies as follows: mathematical models provide optimal plans via a novel approach to the supply chain planning mechanism of the Company. Simulation models execute the supply chain plans so as to allow the examination of the outcomes under the various sources of uncertainty. The iterative use of optimisation and simulation methodologies allows the user the benefit of obtaining optimal solutions while revealing the impact of uncertainties on system performance. Our results indicate that demand uncertainty has the greatest negative impact on performance for the supply chain that we modelled in this study, emphasising the importance of effective forecasting. The relative importance of supply and lead-time uncertainties varies according to the performance measures. While our results are valid for the specific supply chain and the operating environment we modelled, our study emphasises the importance of the ability to model supply chains realistically to obtain valid and useful results.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
