Abstract
The sustainability of the supply chain is possible only if the profitability of all the tiers participating in that supply chain is guaranteed. The profitability of each of these tiers is ensured if information sharing as well as an effective and seamless coordination system are realized between the tiers. This process reduces the influence of an important risk factor known as the bullwhip effect. The purpose of the current study is to determine the necessary information sharing level to optimize the supply chain that has asymmetric flows of input and output values and to examine the effects of information sharing on the order fill rate (OFR) and total inventory cost (TIC) of the supply chain through analysis of variance (ANOVA) testing. In this work, the supply chain was optimized by using the particle swarm optimization (PSO) technique, with an objective function that assumes the maximization of OFR and minimization of TIC. The proposed method showed excellent results in comparing the mean, variance, and coefficient of variation. In addition, the method used the ANOVA test with a 5% significance level to verify the impact of the information sharing level.
Highlights
Chain management (SCM) is defined as a way to maximize profitability while keeping the overall cost of the supply chain to a minimum and meeting the customer’s service requirements at the same time
The total inventory cost (TIC) consists of the sum of the shortage cost (BLC) and inventory holding cost (HIC) at each tier (i = 1, . . . , m) during time t (t = 1, . . . , n)
The current study introduced a method that automatically adjusts the conditions by considering the level of information shared in terms of TIC and order fill rate (OFR) in the supply chain
Summary
Chain management (SCM) is defined as a way to maximize profitability while keeping the overall cost of the supply chain to a minimum and meeting the customer’s service requirements at the same time. SCM is described as a systematic method that can be used to effectively integrate suppliers, manufacturers, distributors, and retailers so that an optimal product can be delivered in optimal amounts, at an optimal location, and at the optimal time [1]. The most ideal supply chain is the symmetric chain in which the product quantity, equal to the order quantity of the tier, is transferred from the upstream tier to the downstream tier. Chains are complicated systems, involving, for example, demand handling, lead-times, batch orders, payments, price changes, and promotions [2]. This means that unexpected problems can arise. The most prominent of these is the “bullwhip effect”, whereby errors in demand forecasts increase along the supply chain [3]
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