A multi-period and multi-product optimizer for cooperative supply chains
Members in a traditional supply chain compete to reduce their individual costs. But total cost is minimized in a cooperative, or a corporate managed, supply chain. A lower average cost and a lower cost variation are achieved by cooperative individual members in the long-run. The problem is formulate...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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AOSIS
2012-03-01
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| Series: | South African Journal of Business Management |
| Online Access: | https://sajbm.org/index.php/sajbm/article/view/178 |
| Summary: | Members in a traditional supply chain compete to reduce their individual costs. But total cost is minimized in a cooperative, or a corporate managed, supply chain. A lower average cost and a lower cost variation are achieved by cooperative individual members in the long-run. The problem is formulated and solved as an integrated flow network. Previous research is expanded to include multi-period and multi-product cooperative supply chain with possibility of holding inventory in a multi-stage, multi-member setup. A Cooperative Supply Optimizer System (CSOS), a software-based coordination mechanism, is developed for large chains. It gathers operational information from members of the supply chain, and then guides them on ordering decisions for a minimum cost of the entire supply chain. Simulation results indicate an approximately 26% reduction in total supply chain costs, utilizing this formulation over a competitive setup. As the holding costs increase, the problem decomposes into single period (Just-in-time) again. The disturbing bullwhip effect disappears in cooperative supply chains. |
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| ISSN: | 2078-5585 2078-5976 |