Order allocation in a multiple suppliers-manufacturers environment within a dynamic cluster

Abstract

This study faces the problem of how to evaluate order allocation strategies in a multiple suppliers-manufacturers environment within a dynamic industry cluster that is an environment in which suppliers adopt a policy based on their performance to select the clusters in which to operate. Therefore, the allocation strategy performed by the manufacturers is crucial to keep a long-term supply chain partnership with a specific industry cluster. We use simulation to evaluate order allocation strategies under different market conditions. We show how an allocation strategy that takes into account the whole supply chain’s perspective leads to a sustainable development of the clusters of suppliers.