MAXIMIZING CUMULATIVE VARIANT PROFIT THROUGH EVALUATION OF SUPPLY CHAIN STRATEGIES

Open Access
Author:
Mohandas, Renju
Graduate Program:
Industrial Engineering
Degree:
Master of Science
Document Type:
Master Thesis
Date of Defense:
None
Committee Members:
  • Gul Kremer, Thesis Advisor
  • Vittaldas V Prabhu, Thesis Advisor
Keywords:
  • Simulation
  • Supply Chain Strategies
  • Cumulative Variant Profit
  • Supply Chain
  • Supply Chain Simulation
Abstract:
Analyzing supply chain strategies for a product with seasonal demand provides significant insight into the cost associated with the supply chain in different seasons. Due to the variability in demand, retailers tend to place orders late so as to reduce their demand forecast error. In most cases, manufacturers have limited production capacity and coping with huge last minute demand results in varying overtime costs, order cut costs and customer service issues. Overall cumulative variant profit is introduced as a measure that determines the overall profitability of a supply chain strategy considering periodic variation in the parameters that affect the supply chain profitability. It takes into account parameters that are most crucial in determining the cost of the supply chain. Selection of these parameters was done after an extensive survey of literature on all parameters that affected the total cost associated with a supply chain operation. In this thesis, simulation models of different supply chain strategies for a multi-echelon supply chain constituting of raw material suppliers, a single manufacturing unit and five different distribution centers were developed to determine the overall cumulative variant profit. When all periods were considered together, the Just-in-Time strategy with doubled capacity had the highest overall cumulative variant profit. On the other hand, when individual periods were considered, it was observed that in different periods different strategies had better overall cumulative variant profit. The overall cumulative profit of the period was related to the inherent characteristics of that period. This helped conclude that depending on the time frame, different strategies can be employed so as to yield a higher overall cumulative variant profit.