Simulation of scheduled ordering policies in distribution supply chains

Abstract

In this paper we study a decentralized distribution supply chain with one supplier and many newsvendor-type retailers that face exogenous end-customer demands. Using total supply chain cost as our primary measure of performance, we compare two scheduled ordering policies - Balanced ordering and Synchronized ordering - with the traditional newsvendor-type ordering behavior. Via the use of simulation, we evaluate the effectiveness of the two scheduled ordering policies, and identify how the performance of the scheduled ordering policies changes with different supply chain parameters, such as the number of retailers, the supplier's expediting cost, the supplier's capacity limit, etc. © 2007 IEEE.