Capacity constrained supply chains: a simulation study. (18th December 2008)

• Record Type: Journal Article
• Authors: Cannella, Salvatore; Ciancimino, Elena; Marquez, Adolfo Crespo
• Is Part Of: International journal of simulation and process modelling. Volume 4:Number 2(2008)
• Page Start: 139
• Page End: 147
• Publication Date: 2008-12-18
• Subjects: multi-echelon -- centralised supply chains -- supply chain management -- SCM -- limited capacity -- bullwhip effect -- demand amplification -- order policy -- periodic review -- order-up-to -- APIOBPCS -- smoothing replenishment -- EPOS -- supply chain metrics -- customer service level -- continuous time differential equation -- supply chain constraints -- constrained capacity -- supply chain performance -- inventory stability -- supply chain collaboration; Management -- Computer simulation -- Periodicals; Mathematical models -- Periodicals; Operations research -- Periodicals; Simulation methods -- Periodicals; 003.05
• Languages: English
• ISSNs: 1740-2123

Abstract

This paper explores the relationship between constrained capacity and supply chain performance. Six capacity constraint levels are studied under different inventory policies and information sharing strategies. The results suggest that an increment of production capacity, used in industry as local approach to manage increasing incoming orders, does not necessarily imply an improvement in customer service. In presence of information distortions, the strategy of augmenting production capacity can lead to satisfy at a higher cost an over-estimated market demand. The collaborative practices provide bullwhip effect dampening and inventory stability, and increase the ability of the structure to avoid this risk.