Abstract
AbstractBased on a Petri-net based simulation model, we investigate the effect of different customer response to stock-out on both the stock-out supply chain and the competing supply chain. Five types of customer stock-out responses are incorporated in the model to quantitatively assess the correlation between customer response and supply chain performance including bullwhip effect (BWE), on-hand inventory, and backlog level. After presenting the results of a series of Petri-net based simulation experiments, we discuss opportunities for both manufacturers and retailers to work better together to mitigate supply chain disruption. We also discuss the value of information sharing on mitigating BWE.
Highlights
Supply chain management has long emphasized on better managing product inventory through advanced information systems and inventory tracking technology, out-of-stocks (OOSs) are still prevalent in retail markets
Literature review we review the literature on supply chain stock-out disruption, customer response to retailer OOS and bullwhip effect (BWE) as the foundation of the Petri-net based simulation model
Conclusions and future research In this paper, a high-level Petri-net model is developed to study the impact of customer response to stock-out on the supply chain performance
Summary
Supply chain management has long emphasized on better managing product inventory through advanced information systems and inventory tracking technology, out-of-stocks (OOSs) are still prevalent in retail markets. We seek to understand how customer response to stock-out impact the BWE of the supply chains through creation of a Petri-net based simulation model. A Petri-net based model including five customer stock-out responses collected from marketing literature was developed to study the supply chain performance. When one brand of product encounters stock-out, the Petri-net based simulation analyzes the impact of customer response on the supply chain performance of both the stock-out brand and the competing brand. 2. Literature review we review the literature on supply chain stock-out disruption, customer response to retailer OOS and BWE as the foundation of the Petri-net based simulation model. 3. Research method we present a Petri-net based simulation to investigate the impact of customer response on supply chain performance. Any demand that is not satisfied is added as stock-out of the retailer and any unsatisfied order at the manufacturers’ is added as backlog
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