Management of demand uncertainty in supply chain cost planning. Issue 4 (2015)

• Record Type: Journal Article
• Authors: Mangal, Dharamvir; Gupta, Tarun Kumar
• Is Part Of: International journal of logistics systems and management. Volume 22:Issue 4(2015)
• Page Start: 399
• Page End: 413
• Publication Date: 2015
• Subjects: supply chain management -- SCM -- production planning -- demand uncertainty management -- customer satisfaction level -- safety stock levels -- supply chain costs -- cost planning -- scheduling; Business logistics -- Periodicals; 658.5005
• Languages: English
• ISSNs: 1742-7967

Abstract

Cost effective supply chain management under various market, logistics and production uncertainties is a critical issue for companies in the current development. Reservations in the supply chain usually increase the variance of profits (or costs) to the company, increasing the likelihood of decreased profit. Demand uncertainty, in particular, is an important factor to be considered in the supply chain design and operations. To hedge against demand uncertainty, safety stock levels are commonly introduced in supply chain operations as well as in supply chain design. In this paper, the authors proposed the use of deterministic planning and scheduling models which incorporate safety stock levels as a means of accommodating demand uncertainties in routine operation.