A system dynamic approach to study the behaviour of serial supply chain under uncertain environment

In order to gain a competitive edge, currently it is being emphasised to improve the performance of the whole supply chain instead of individual entities within it. However, uncertainties allied along the supply chain causes an adverse effect on performance measures such as the bullwhip effect (BWE) and total cost leading to decrease in the service level and profitability of an organisation. Therefore, in this work, a four level serial supply chain employed with (s, S) replenishment policy is modelled though a system dynamics approach to mimic the behaviour of the supply chain. Performance measures of the system are estimated under the influence of stochastic variation of lead time and demand through simulations approach. The effect of ordering decision parameter (e.g., target inventory) on supply chain performance has been studied under the above uncertainties. A design of experiment (DOE) approach has been implemented to generate the experimental scenarios and study the influence of individual and interaction effect of system parameters on performance. Best parametric combination that simultaneously optimises two performance measures such as BWE and total cost has been reported.