Linking marketing and supply chain models for improved business strategic decision support

Abstract

A supply chain (SC) model incorporating business strategic decision components is an important tool for gaining a competitive edge in todays global market. Enterprise models of this type must encompass not only the SC, but also the demand chain since understanding the market is crucial for developing good business policies. To operate effectively, marketing activities must be coordinated with other corporate functional areas. Specifically, managers should evaluate the trade-off between marketing and SC decisions to enhance the performance of the overall metric: the shareholders value. Recently, there has been significant progress in developing marketing science models for reaching quantitatively based marketing decisions. In this work, we build on these developments to formulate a mathematical model that accounts for the main relevant business functionalities. The result is a MINLP formulation which optimizes the SC and marketing strategic decisions in an integrated fashion. Moreover, a financial model that evaluates the enterprise value is also incorporated.