Assessing the supply chain performance: a causal analysis

Erkan Bayraktar, Kazim Sari, Ekrem Tatoglu, Selim Zaim, Dursun Delen

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

Measuring the performance-related factors of a unit within a supply-chain is a challenging problem, mainly because of the complex interactions among the members governed by the supply chain strategy employed. Synergistic use of discrete-event simulation and structural equation modeling allows researchers and practitioners to analyze causal relationships between order-fulfillment characteristics of a supply-chain and retailers’ performance metrics. In this study, we model, simulate, and analyze a two-level supply-chain with seasonal linear demand, and using the information therein, develop a causal model to measure the links/relationships among the order-fulfillment factors and the retailer’s performance. According to the findings, of all the order-fulfillment characteristics of a supply-chain, the forecast inaccuracy was found to be the most important in mitigating the bullwhip effect. Concerning the total inventory cost and fill-rate as performance indicators of retailers, the desired service level had the highest priority, followed by the lead-time and forecast inaccuracy, respectively. To reduce the total inventory cost, the bullwhip effect seems to have the lowest priority for the retailers, as it does not appear to have a significant impact on the fill rate. Although seasonality (to some extent) influences the retailer’s performance, it does not seem to have a significant impact on the ranking of the factors affecting retailers’ supply-chain performance; except for the case where the backorder cost is overestimated.

Original languageEnglish
Pages (from-to)37-60
Number of pages24
JournalAnnals of Operations Research
Volume287
Issue number1
DOIs
StateAccepted/In press - 1 Jan 2019
Externally publishedYes

Keywords

  • Bullwhip effect
  • Causal analysis
  • Retailers’ performance
  • SCM
  • Service level

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