Supply chain performance evaluation: a simulation study

As more and more companies are relying on their suppliers to provide raw materials or component parts, effective coordination and inventory management of supply chain members became critical issues. Various methods including information sharing and postponing strategy have been explored to improve supply chain performance. However, questions regarding what information to share and the benefits under different conditions for different members are not fully understood. This paper presents a simulation study on a three-level infinite capacity supply chain through a systematic design of experiments. Independent variables include lead times, information sharing patterns, demand uncertainties, and service levels. It is shown through the analysis of means and the analysis of variance that one-way full information sharing is sufficient to achieve good performance. The types of benefit received by different members, however, are different. Furthermore, as more information is shared, the benefit from postponing customization decreases.