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A simulation model of a coordinated decentralized supply chain. (English) Zbl 1337.90015
Summary: This paper presents a simulation-based study of a coordinated, decentralized linear supply chain (SC) system. In the proposed model, any supply tier considers its successors as part of its inventory system and generates replenishment orders on the basis of its partners’ operational information. We show that the proposed coordinated decision-making process creates a reduction in information distortion along an SC compared with a traditional, noncoordinated strategy. A novel result is that we show how a coordinated SC can avoid the detrimental consequences of demand amplification in terms of penalty costs due to the stockout phenomenon in upstream stages.

MSC:
90B06 Transportation, logistics and supply chain management
90B05 Inventory, storage, reservoirs
90B50 Management decision making, including multiple objectives
Software:
DYNAMO; Vensim
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