Analyzing the Impact of Coordinated Decisions within a Three-Echelon Supply Chain

Analyzing the Impact of Coordinated Decisions within a Three-Echelon Supply Chain

Mauricio Núñez-Muñoz, Jairo R. Montoya-Torres
Copyright: © 2009 |Pages: 15
DOI: 10.4018/jisscm.2009040101
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Abstract

Supply chain performance is highly influenced by the coordination level between its members, which needs information sharing. In this article we consider a three-echelon direct sell supply chain model and focus on the problem of coordinated decision-making between its members. Our contribution is a first approach that measures the impact of the degree of coordination between the members. Demand behavior is modeled using a geometric Brownian process. Simulation models are run in order to analyze various cooperation scenarios. Our results show a direct relation between the degree of coordination within the supply chain and the total system cost. Although this result is intuitive, our simulations allowed us to quantify such a relation and in which measure these costs are whether or not associated to imperfect coordination

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