Comparative evaluation of supply chain replenishment strategies in a capacitated supply chain

Date
2012
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Abstract
This research is intended to evaluate supply chain replenishment strategies m level and seasonal demand environments under optimal decision variable settings. A taxonomy is devised to give insights into the selection of evaluation approaches. An optimal trade-off curve approach is then proposed to compare the replenishment strategies in a manner leading to robust conclusions. A highly parametric and flexible simulation model is developed to explore the behaviour and performance of reorder point and Kanban strategies under different supply chain factors. This simulation model is run in conjunction with a heuristic optimization engine to perform optimum-seeking simulations. The methodology allows optimal decision variables to be determined, including the timing of dynamic adjustments under seasonal demand. The first part of the research focuses on the comparative evaluation of reorder point and Kanban strategies under level demand. Each strategy is optimized with the objective of minimizing total inventory subject to various target customer service levels. Optimal trade-off curves are generated to compare the relative performance of these strategies over the range of service levels. Further, these trade-off curves are used to develop an index to quantify robustness and compare strategies based on robustness. The second part of this research focuses on performance evaluation under seasonal demand with optimal decision variable settings. A simulation-optimization based methodology is developed to dynamically adjust the decision variable settings for specific demand regions. A further experimental design is set up to assess the benefits of dynamic adjustment under different seasonal demand patterns. The results show that the reorder point strategy dominates the Kanban strategy under level demand, with lower inventories for the same target service levels. Robustness evaluation reveals that the Kanban strategy is more robust than the reorder point strategy under changes such as transit time variability and transporter frequency. However, the reorder point strategy is more robust with respect to changes in the mean demand level. Further, the results under seasonal demand show that optimal dynamic adjustment of decision variables significantly reduces inventory and backorder wait times. Comparative analysis, under seasonal demand, leads to the conclusion that the reorder point strategy outperforms the Kanban strategy on every performance measure of interest. All results are validated using appropriate statistical methods.
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Bibliography: p. 189-201
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Citation
Grewal, C. S. (2012). Comparative evaluation of supply chain replenishment strategies in a capacitated supply chain (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca. doi:10.11575/PRISM/4700
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