Performance improvement of supply chain processes by coordinated inventory and capacity management

Performance improvement of supply chain processes by coordinated inventory and capacity management

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Article ID: iaor20081762
Country: Netherlands
Volume: 108
Issue: 1/2
Start Page Number: 183
End Page Number: 190
Publication Date: Jan 2007
Journal: International Journal of Production Economics
Authors: ,
Keywords: inventory, simulation: applications
Abstract:

This study discusses the opportunities and challenges for improving the performance of supply chain processes by coordinated application of inventory management and capacity management. We illustrate our approach by a supplier company in the telecommunication and automotive industry (tier 2), where a manufacturer (production facility) is located in a country with low labor costs and high worker deployment flexibility. Using process simulation, we demonstrate how the coordinated application of methods from inventory management and capacity management result in improved performance measures of both intraorganizational (costs) and interorganizational (service level) objectives.

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