Abstract
The synchronization and coordination of material flows is a key element in the supply chain management. To analyze the effects of coordinated replenishment for components, we consider an assembly system with two component-suppliers, one supply-hub and one manufacturer, under stochastic final product demand. We propose three different strategies: (i) the decentralized replenishment, (ii) the coordinated replenishment without coordinated quantity, and (iii) the coordinated replenishment policy with coordinated quantity for infinite planning horizon. We propose optimal decisions for all strategies. Results show that policy (ii) is always better than policy (i). We further identify the conditions under which the third strategy outperforms the other two. Policy (iii) is better on cost saving and service level, only when it satisfies certain conditions. Numerical studies are conducted to validate the model and to derive managerial implications.
Highlights
An assembly system is more complex than a distribution system, and the coordination of components is a key issue in assembly [1]
The reason why cost advantage deteriorates with B is that the number of expected backorder in the coordinated replenishment cycle of CCRP-1 is larger than that in CRP
Joint coordination of material flows is critical for supply chain (SC) efficiency
Summary
An assembly system is more complex than a distribution system, and the coordination of components is a key issue in assembly [1]. A supply hub provides centralized components inventory management, picking and JIT delivery to the manufacturer’s production line [2, 3]. In practice, a supply-hub is only serving as a central warehouse to store components, without actively coordinating suppliers’ material flows. De Boeck and Vandaele [9] study a generic first-come first-serve assembly system They find that parts supply has to be synchronised and needs a cap in order to shut down the input streams. Zhang et al [18] analyze collaborative replenishment in a two-level supply chain consisting of three suppliers and one manufacturer under uncertain demand, proposes three replenishment strategies. Results show that supply chain cost and collaborative timing of coordinated replenishment strategy are always lower than that of supplier independent replenishment model. Our study confirms the value of coordinated replenishment policy, and contributes to the replenishment policy making in the presence of supply-hubs
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