Global Supply Chain Management
What are base and surge demand strategies?
*Base demand:* - Can be forecasted based on past data. It can be met through lean processes to achieve economies of scale. *Surge demand:* - More difficult to predict. Surge demand is provided for through agile, and probably higher cost, processes. Strategies such as these are increasingly being employed in the fashion industry where the base demand can be sourced in low cost countries and the surge demand "topped up" locally nearer to the market. Even though the unit cost of manufacture in local markets will be higher than sourcing in low cost locations, the advantage can be considerable.
What are the 4 causes of the bullwhip effect?
*Rationing game:* - Strategic ordering behavior of buyers when supply shortage is anticipated. Rationing is common during the growth phase of the product life-cycle when demand outstrips supply. *Price variations:* - Purchase prices of products are typically non-constant, e.g., if price promotions are conducted in the maturity phase of a product to increase market share *Order batching:* - When the fixed order cost is nonzero, ordering in every period would be uneconomical, and batching of orders would occur. Order batching is a routine part of buyers' decision process. *Demand signal processing:* - Let us assume that demand is nonstationary and past demand information is used to update forecasts. Retailers routinely use demand realizations as signals/predictors of future demand.
What are the assumptions of Economic Order Quantity?
- Demand for the product is constant and uniform throughput the period. - Lead time (= time from ordering to receipt) is constant. - Price per unit of product is constant. - Inventory holding cost is based on average inventory. - Ordering or setup costs are constant. - All demands for the product will be satisfied. - No back orders are allowed.
What is support processes?
- Processes that are needed to make the core processes work - Examples: invoicing customers, creating forecasts, planning production, budgeting
What is make-to-order?
- Supply chain that is able to change to different products as long as they are made from the same raw materials. - It will cope with varied locations, volumes and product mixes. - The lead time will be reduced but the endusers might have to accept a considerable wait to get the product. *Advantages* - Reduce inventory - Customer experience
What is a traditional definition of supply chain?
A network of connected and interdependent organisations mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end users
What is ship-to-stock?
Again, a standard product is provided from a defined range. Here, a standard product is provided in fixed locations. Also here, the members of the supply chain must be able to forecast demand accurately
What is a node?
An establishment which is an agent that has the ability to make decisions and maximize its own gain within the parameters in which it operates
Name 5 strategies to control risks.
*Risk Avoidance* - Eliminate the types of event that could trigger the risk. *Risk Reduction* - Reduce the probability and/or the consequence of a risk. *Risk Transfer* - Transfer to third parties, e.g., insurance companies, SC partners, customers. *Risk Sharing* - Implement contractual mechanisms and pursue collaboration. *Risk Taking* - Take the potential risk impact, i.e., do not pursue any other strategy.
What are the 4 phases of supply chain risk management?
*Risk identification* - Enumerating the causes/sources of potential supply chain disruptions. *Risk Assessment* - Evaluating likelihood of occurrence and impact that event will have on the business for each cause/source of disruptions. *Risk controlling* - Prioritizing causes/sources of disruptions and developing strategies for reducing the likelihood and/or mitigating the impact. *Risk monitoring* - Monitoring developments of risks on an on-going basis, including political risks and risks related to markets and suppliers.
Name 5 vulnerabilities of supply chains.
- The trend towards economies of scale leads to centralized distribution/manufacturing and, thus, less flexibility. - The trend towards just-in-time and lean practices leads to efficiency rather than effectiveness. - The trend towards outsourcing of non-core business activities leads to loss of control. - The trend towards consolidation of suppliers leads to increased potential for supply failure. - The trend towards reducing costs leads to globalization and, thus, more complex supply chains.
What is one way for suppliers to avoid a rationing game?
- To avoid the nonproductive gaming, one can design a different rule of allocating supply across retailers in a shortage situation. - Allocate the supply in proportion to the retailer's market share in the previous period (i.e., retailer's share of total sales of the product). - General Motors, allocates products in shortage to dealers based on historic sales records. Texas Instruments and Hewlett-Packard also use this method when allocation of fast moving products is necessary. - Restrict the buyer's flexibility since an unrestricted choice of order quantities and generous cancellation policies all lead to gaming.
What are the three Vs in Big Data?
- Volume: It is estimated that Walmart collects more than 2.5 petabytes of data every hour from its customer transactions. - Velocity: Real-time or nearly real-time information makes it possible for a company to be much more agile than its competitors. - Variety: Data takes the form of messages, updates, images posted to social networks; readings from sensors; GPS signals from phones
Managers must make two key decisions when designing a distribution network. What are they?
- Will the product be delivered to the customer location or picked up from a prearranged site? - Will product flow through an intermediary (or intermediate location)?
There are 6 distinct distribution network designs that may be used to move products from factory to customer. What are they?
1. Manufacturer storage with direct shipping. 2. Manufacturer storage with direct shipping and in-transit merge. 3. Dstributor storage with carrier delviery. 4. Distributor storage with last-mile delivery. 5. Manufacturer/distributor storage with customer pickup 6. Retail storage with customer pickup.
What are the 3 principles in The Circular Economy?
1. Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows. 2. Optimize resource yields by circulating products, components and materials in use at the highest utility at all times in both technical and biological cycles. 3. Foster system effectiveness by revealing and designing out negative externalities
What are the two primary reasons for understanding/measuring processes before redesigning them? (step 3 in process redesign)
1. Problems must be understood so that they are not repeated. 2. Measurement can serve as a baseline for future improvements.
What are the six foundational premises of a supply chain conceptualization?
1. The supply chain is a network, consisting of nodes and links. 2. The supply chain as a network operates as a complex adaptive system, where every agent grapples with the tension between control and emergence. 3. The supply chain is relative to a particular product and agent. 4. The supply chain consists of both a physical supply chain and a support supply chain 5. The supply chain is bounded by the visible horizon of the focal agent. 6. The visible horizon of the focal agent is subject to attenuation, where distance is based on factors including physical distance, cultural distance, and closeness centrality
What is a bluenumber?
A bluenumber is a unique number that identifies people, organisations, places and things. This means that any person anywhere on the planet now has a digital identity and can connect it to other systems and organisations to be recognised and access services and benefits.
What is a delay in supply chain risk management?
A delay in material flow can be viewed as a recurrent risk and can occur because of many reasons, such as variations in transportation or production lead times.
What is a disruption in supply chain risk management?
A disruption occurs when the supply chain is radically and unexpectedly transformed through nonavailability of certain production, warehousing, distribution, or transportation options, such as equipment failure
What is a distortion in supply chain risk management?
A distortion, also known as "forecast risk," occurs when one or more parameters within the supply chain system, such as order sizes, stray from their forecasted and expected values
What is ecological footprint?
A measure of how much area of biologically productive land and water an individual, population or activity requires to produce all the resources it consumes and to absorb the waste it generates, using prevailing technology and resource management practices.
What is the European Commission's definition of CSR?
A process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of: - maximising the creation of shared value for their owners/shareholders and for their other stakeholders and society at large; - identifying, preventing and mitigating their possible adverse impacts.
What is the sustainability rule of thumb?
A rule-of-thumb I give managers is that if your sustainability performance indicators only improve when customers use your product less often, it means you're in trouble.
What is a business process?
A set of logically related tasks performed to achieve a defined business outcome.
What is Mentzner et al.'s definition of Supply Chain?
A set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flows of products, services, finances and/or information from a source to a customer.
What is a Vanilla box?
A vanilla box is defined as a semi-finished product that can serve more than one final product. Inventory is stored in this intermediate form. Components and finished products can be seen as two extreme forms of vanilla boxes.
What are three ways to deal with supply-side risks?
Additional inventory - Additional inventory can be used to gain time. Multiple suppliers - Multiple suppliers - ideally, from multiple regions - producing similar products can be contracted. Support of suppliers - Suppliers of critical parts under insolvency risk can be supported financially to buy the firm time.
What is vendor-managed inventory?
The vendor assumes responsibility for managing inventories at buyers. Reviewing the buyer's inventory levels, the [vendor] makes decisions regarding the quantity and timing of resupply. This implies that inventory information at the buyer is accessible to the vendor.
When do you use the strategy "hybrid" (de-couple through postponement)?
Unpredictable demand and long leadtimes.
When do you use the "agility" strategy?
Unpredictable demand and short lead times.
What is the Square root law and what is the formula?
The square root law is a simple rule of thumb, stating that safety stocks can be reduced by the square root of the number of distribution centers. Sc = Sd x √(nc / nd)
What is just-in-time?
The term is used to indicate that a process is capable of instant response to demand without the need for any overstocking
What is Time to recovery (TTR)
The time it would take for a particular node - a supplier facility, a distribution center, or a transportation hub - to be restored to full functionality after a disruption.
Define value added.
The value added by a firm; i.e. the value created by the activities of the firm and its employees, can be measured by the difference between the market value of the goods that have been turned out by the firm and the cost of those goods and materials purchased from other producers. This measure will exclude the contribution made by other producers to the total value of this firm's production, so that it is essentially equal to the market value created by this firm. The value added measure assesses the net contribution made by each firm to the total value of production; by adding up all these contributions. therefore it is possible to arrive at a total for the whole economy.
What is one counter-measure to price variations in the bullwhip effect?
- Every Day Low Price - The buyer agrees to buy a large quantity of goods at a discount, but the goods are delivered in multiple future time points and are evenly separated. - This way, the manufacturer can plan production more efficiently, the buyer can enjoy her strategic buying practice, and both parties can save inventory carrying costs.
What is Ecologically Dominant logic regarding sustainable supply chain strategies?
- How can a supply chain become sustainable? - When trade-offs are inevitably encountered, the priority is the environment, then society and only then profits.
What is Instrumental logic regarding sustainable supply chain strategies?
- How can a supply chain benefit from addressing environmental or social issues? - One construct, sustainability, influences another, economic performance, e.g. profits. - Economic performance is the goal, not sustainability! - What can existing firms do to reduce their harm while increasing their profits? - Research usually conducted from the perspective of a focal firm, not supply chain.
What is the exhaustive approach in business process redesign?
- Identify all processes within an organization (or supply chain!) and then prioritize them in order of redesign urgency. - Often associated with "information engineering" (i.e., use of data dictates processes to be redesigned). --> Limited resources can make this approach very difficult.
What is the high-impact approach in business process redesign?
- Identify only the most important processes or those most in conflict with the business vision and process objectives. - Most organizations have some sense of which areas are most crucial to their success (otherwise: workshops, ...). --> This approach might be sufficient in most cases.
What are the assumptions behind the Square Root Law?
- It is assumed that each individual distribution center serves an exclusive market area, demand varies randomly and safety stock levels are statistically determined. - All distribution centers maintain the same level of safety (buffer) stock protection. This assumption is consistent with the practice of many companies that seek to standardize product availability across the market. - Demands at each distribution center in the decentralized system are not correlated. This assumption is questionable when customers do not accept supplier-defined market territories, i.e., when they can get products more easily and cheaply from other distribution centers.
What are the counter-measures of demand signal processing?
- One clear solution is to grant the manufacturer access to the demand data at the retail outlet. - The grocery industry is a good illustration of demand information sharing. Electronic data interchange systems between retailers and manufacturers have become fairly common. These systems facilitate quick and easy transmission of demand data to upstream members of the channel. - The computer industry is also making some progress in this regard. Manufacturers such as IBM, Hewlett-Packard and Apple are increasingly requesting sell-through data from their resellers. - Vendor-managed inventory
When do you use the strategy "leanness"?
- Predictable demand and long leadtimes.
What is management processes?
- Processes that govern core processes and support processes - Examples: establishing directions for the organization, showing the direction, creating conditions, follow-up and correction
What is core processes?
- Processes whose activities enable goods and services to reach an external customer - Processes that realize the business goal - Processes that together constitute the foundation of the business (if one process is taken away the business fails) - Examples: developing new products
What are the characteristics of an innovative product according to Fisher's model?
- Product life cycle: 3 months to 1 year - Contribution margin: 20-60% - Product variety: high (often millions variants per category) - Average margin of error in the forecast at the time production is committed: 40-100% - Average stock-out rate: 10-40% - Average forced end-of-season markdown as percentage of full price: 10-25% - Lead time required for made-to-order products: 1 day to 2 weeks.
What are the characteristics of a functional product according to Fisher's model?
- Product life cycle: more than 2 years - Contribution margin: 5-20% - Product variety: low (10-20 variants per category) - Average margin of error in the forecast at the time production is committed: 10% - Average stock-out rate: 1-2% - Average forced end-of-season markdown as percentage of full price: 0% - Lead time required for made-to-order products: 6 months to 1 year.
What is the 80/20 rule?
- 80/20 rule: "80% of volume will be generated from 20% of product line." - Top 20% of products by volume are likely to be more predictable and hence they lend themselves to lean principles. - Slow moving 80% will typically be less predictable and will require a more agile mode of management.
What is crossdocking?
Crossdocking is a specific way of transshipment. In contrast to order picking, the units that contain the goods are not changed.
What is buy-to-order?
- Supply chain that is suitable if all the products are unique and do not necessarily contain the same raw materials, where the end-user is prepared to accept long lead times and demand for products is highly variable. - Holding stock would run the risk of them becoming obsolete. - The product can not be sold to more than one customer.
What is safety or buffer stock?
Held in excess of cycle stock because of uncertainty in demand or lead time.
What is sustainability?
Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Explain the steps in the Gartner Hype Cycle.
*Technology trigger* - A potential technology breakthrough kicks things off. Early proof-ofconcept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven. *Peak of Inflated Expectations* - Early publicity produces a number of success stories - often accompanied by scores of failures. Some companies take action; many do not. *Trough of Disillusionment* - Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters. *Slope of Enlightenment* - More instances of how the technology can benefit the enterprise start to crystallize. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious. *Plateau of Productivity* - Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology's broad market applicability and relevance are clearly paying off.
Why hold inventory? (5)
- *Economies of Scale:* Ordering large quantities allows to take advantage of price reductions; less transportation cost per unit. - *Balancing Supply and Demand:* Seasonal supply/demand, e.g. garden furniture should be produced in winter, as well. - *Specialization:* Cost savings in the operation of consolidation warehouses that allow to specialize manufacturing by location. - *Protection from Uncertainties:* Prevent a stock-out in the case of variability in demand or in the replenishment cycle. - *Buffer:* Channel participants are separated geographically, making inventory necessary to achieve time and place utility.
Which activities are necessary to successfully implement a SCM philiosophy?
- *Integrated behavior* (must expand to incorporate customers and suppliers) - *Mutually sharing information* (inventory levels, forecasts, sales promotion etc. to reduce uncertainty between partners.) - *Mutually sharing risks and rewards* (Yield competitive advantage and should happen over time. Important for long-term focus and cooperation) - *Cooperation* (Coordinated activities to produce superior mutual outcomes. For example reduce inventories and pursue cost-efficiencies.) - *The same goal and the same focus on serving customers* (A form of policy integration) - *Integration of processes* (both within in the company and then extending to include partners outside) - *Partners to build and maintain long-term relationships*
TTS and TTR can be used for strategic decisions on three different levels, what are they?
- *Strategic decisions:* To identify exposure to risk associated with parts and suppliers, prioritize and allocate resources effectively, develop mitigation strategies, and identify opportunities to reduce risk mitigation cost. - *Tactical decisions:* To monitor changes in risk exposure on a daily or weekly basis. - *Operational decisions:* To identify an effective way to allocate resources after a disruption.
There are 3 degrees of supply chain complexity. What are they?
- A direct supply chain - An extended supply chain - An ultimate supply chain.
What is business process reengineering?
- A reengineering effort strives for dramatic levels of improvement. - It must break away from conventional wisdom and the constraints of organizational boundaries and should be broad and cross-functional in scope. - It should use information technology not to automate an existing process but to enable a new one.
What is make-to-stock?
- A standard product is provided from a defined range. - The supply chain can cope with demands in varied locations but calls for a steady overall demand of a standard product. - The members of the supply chain must be able to forecast demand accurately.
What are the characteristics of SCM as a management philosophy?
- A systems approach to viewing the supply chain as a whole, and to managing the total flow of goods inventory from the supplier to the ultimate customer. - A strategic orientation toward cooperative efforts to synchronize and converge intrafirm and interfirm operational and strategic capabilities into a unified whole. - A customer focus to create unique and individualized sources of customer value, leading to customer satisfaction (based on the synchronization of SC activities).
What are the features of manufacturer storage with direct shipping?
- Also referred to as drop-shipping. - Product shipped directly from manufacturer to the end customer, bypassing the retailer. - Biggest advantage: centralize inventories at the manufacturer.
What is demand signal processing?
- Consider a multiperiod inventory model where demand is nonstationary over time, and demand forecasts are updated based on observed demand. With nonstationary demand, the order-up-to point St for period t for the inventory system would also be nonstationary. - Suppose, for example, that the retailer experiences a surge of demand in periot t − 1. She will interpret it as a signal of high future demand, adjust the demand forecast. - A symmetric argument yields that a low demand observed by the retailer will translate to an order that is lower than the original low demand. - Either way the demand observed at the retailer is transmitted to the supplier in an exaggerated form. - As the retailer processes demand signals, the original sales information is distorted and its variance amplifies when passed upstream to the supplier - Additionally, a long lead time in replenishing orders from upstream tends to aggravate the distortion even further.
What are the counter-measures of order batching?
- Coordinating delivery schedules moves the channel away from random or correlated ordering to balanced ordering. - For example, reserve certain time slots (the first and third Tuesday of each month) at the buyer's gate for deliveries. - The manufacturer does not only avoid queuing delays, but also level deliveries to retailers across time, thereby reducing the batching effect as experienced by the manufacturer. - Third party logistics provider. Full truckload is created by consolidating orders from retailers who are in geographical proximity to one another.
What is assemble-to-order?
- Customisation is postponed until as late as possible. - The supply chain is able to respond to a varied product mix from within a range of products. - The lead time is reduced and will depend on where in the supply chain final assembly takes place (protection against risk of obsolescence). - For example Dell Computers. *Advantages:* - Sub parts can be replaced in future once they become obsolete - Higher inventory turnover ratio, leading to low cost - Capability of producing customized product - Quick delivery
According to Lee et al. (2004), what is the behavior of the supply chain members in regards to the bullwhip effect? How to mitigate the effect?
Behavior of supply chain members: - members are rational and optimizing. Mitigating the bullwhip effect: - modify institutional and interorganizational infrastructure and related processes.
According to Sterman (1989), what is the behavior of the supply chain members in regards to the bullwhip effect? How to mitigate the effect?
Behavior of supply chain members: - members lack full rationality and are prone to misperceptions Mitigating the bullwhip effect: - modify individual education.
According to Forrester (1961), what is the behavior of the supply chain members in regards to the bullwhip effect? How to mitigate the effect?
Behavior of supply chain members: - time varying behaviors of the members are assumed. Mitigating the bullwhip effect: - modify behavioral practice
What is speculative stock?
Inventory held for reasons other than satisfying current demand, e.g. when purchasing more to receive discounts.
Describe 4 Process objectives in step 1: Develop business vision and process objectives.
Cost reduction: - Important objective in combination with others - Optimizing on cost rarely brings about other objectives Time reductions: - Processes are an ideal unit for time reductions - Steps could begin simultaneously, rather than sequentially Output quality: - All processes have output! - Measures could be: uniformity, variability, or freedom from defects Resilience, sustainability: - Supply chain processes are increasingly expected to be optimized based on resilience and sustainability objectives
What is cycle stock?
Inventory that results from replenishment of inventory sold or used in production.
What is inventory turnover?
Inventory turnover= annual sales volume at cost/average inventory A higher number indicates that inventory moves through the firm's operations quickly.
What is dead stock?
Items for which no demand has been registered for some specified period of time, e.g. obsolete items.
What is the bullwhip effect?
Definition: Phenomenon where orders to the supplier tend to have larger variance than sales to the buyer (i.e., demand distortion), and the distortion propagates upstream in an amplified form (i.e., variance amplification)
What are the 5 steps in business process redesign?
Develop Business Vision and Process Objectives: - Prioritize objectives and set stretch targets Identify Processes to Be Redesigned - Identify critical or bottleneck processes Understand and Measure Existing Processes - Identify current problems and set baseline Identify IT Levers - Brainstorm new process approaches Design and Build a Prototype of the Process - Implement organizational and technical aspects
What is the definition of distribution?
Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Distribution occurs between every pair of stages in the supply chain.
What are three ways to deal with demand-side risks?
Dynamic pricing - Additional pricing mechanisms are used to entice customers to choose products that are available. Assortment planning - Set of products on display, location of product and number of facings can influence consumer choice. Silent product rollover - Products are "leaked"slowly into market without formal announcement; customer unaware of unique features.
What is fill rate?
Fill rate = 1 - annual backorders/annual demand A 96% fill rate means that 4% of requested units were unavailable when ordered by the customer.
What is in-transit inventories?
Items that are en route between two locations. When calculating inventory carrying costs, they should be considered as inventory at place of shipment origin, as they are not available yet.
What is just-in-sequence?
JIS occurs according to a sequence defined by the customer throughout the supply chain. It can be implemented in delivery, production, and distribution.
What is seasonal stock?
Form of speculative stock that involves the accumulation of inventory before a seasonal period begins.
What is a Continuous Review Inventory Control System?
If reorder point R is reached, a fixed order quantity Q is ordered. It will be delivered after leadtime L. The time between orders may vary.
What is a Periodic Review Inventory Control System?
In the beginning of a period, if inventory position is smaller than s, a variable order quantity is ordered to reach S. The time T between orders is fixed.
What is the logistics performance measure OTIF?
OTIF = number of deliveries OTIF/total number of deliveries OTIF measures % of units delivered on-time, in-full (typically it includes a tolerance defined with the customer). It is measured from the customer's perspective.
What is the definition of order picking?
Order picking can be defined as the process in which goods are taken from the warehouse or buffer in response to customer orders.
When do you use the "kanban" strategy?
Predictable demand and short lead times.
What is the definition of Logistics Management?
That part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements
What is Economic Order Quantity?
The Economic Order Quantity (EOQ) is a "concept which determines the optimal order quantity on the basis of ordering and carrying costs. When incremental ordering costs equal incremental carrying costs, the most economic order quantity exists. It does not optimize order quantity and thus the shipment quantity, on the basis of total logistics costs, but only ordering and carrying costs."
What is an agility strategy?
The ability of a supply chain to rapidly respond to change by adapting its initial stable configuration (reactive) For example - Contingency plan - Lead-time reduction - Trained personnel
What is a robustness strategy?
The ability of a supply chain to resist change without adapting its initial stable configuration (proactive). For example - Multiple sources of supply - Inventory buffers - Flexible transportation.
What is a link?
The connection between two nodes. Links represent transactions consisting of the flow of materials, information, and/or finance between nodes.
What is a Customer Order Decoupling Point? (Order Penetration Point)
The decoupling point separates the part of the supply chain geared towards directly satisfying customer orders [= pull processes] from the part of the supply chain based on planning [= push processes]
What is the business continuity management?
The development of strategies, plans and actions which provide protection or alternative modes of operation for those activities or business processes which, if they were to be interrupted, might otherwise bring about a seriously damaging or potentially fatal loss to the enterprise.
What are some consequences of the bullwhip effect?
The distortion of demand information implies that the manufacturer who only observes its immediate order data will be misled by the amplified demand patterns, and this has serious cost implications, e.g., - Manufacturer incurs excess raw materials cost due to unplanned purchases of supplies - Additional manufacturing expenses created by excess capacity - Inefficient utilization and overtime - Excess warehousing expenses and additional transportation costs due to inefficient scheduling - Premium shipping rates.
What is supply chain risk management?
The implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity
What is a more recent definition of Supply Chain Management?
The management of upstream and downstream relationships with suppliers and customers in order to deliver superior customer value at less cost to the supply chain as a whole
What is Time to survive (TTS)
The maximum duration that the supply chain can match supply with demand after the disruption of a node - a supplier facility, a distribution center, or a transportation hub.
What is the definition of supply chain risk?
Variation in the distribution of possible supply chain outcomes, their likelihood, and their subjective values. Could be either positive or negative.
What does Lee et al.'s theorem states regarding order batching?
Zc,t, Zr,t and Zb,t are the random variables denoting the orders from N retailers, respectively, under correlated ordering, random ordering and balanced ordering Theorem: E[Zc,t] = E[Zr,t] = E[Zb,t] = Nm (expected values) Var[Zc,t] ≥ Var[Zr,t] ≥ Var[Zb,t] ≥ Nσ2 (variances) The theorem states that different ordering patterns generate the same expected amount of orders with different variances.
