Coordination and demand uncertainty in supply chains

Authors: Sepulveda Rojas, J.P.¹; Frein, Y.²

Source: Production Planning and Control, Volume 19, Number 7, October 2008 , pp. 712-721(10)

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Abstract:

We present the importance of coordination for different levels of uncertainty about customer demand. We have defined a framework to study different coordination scenarios. This framework considers the perimeter of decision making (DM) and information sharing between supply chain members. In this article, we have tested two coordination scenarios for different levels of uncertainty about customer demand. These scenarios are applied in two test cases. The most interesting result is: a global optimisation (a global perimeter of DM) remains more powerful than a local optimisation (a local perimeter of DM) if there are uncertainties about customer demand. We even found that global optimisation became more important as uncertainty increased.

Keywords: supply chain planning; operational logistics; global operations and logistics management; best practices and benchmarking

Document Type: Research article

DOI: http://dx.doi.org/10.1080/09537280802573965

Affiliations: 1: Facultad de Ingenieria, Universidad del Desarrollo, Santiago, Chile 2: Laboratoire G-SCOP-INPGrenoble, Grenoble, France

Publication date: 2008-10-01

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