Replenishment behavior in sequential supply chains

Kaboli, Amin (Swiss Federal Institute of Technology at Lausanne (EPFL), Switzerland) ; Glardon Rémy (Swiss Federal Institute of Technology at Lausanne (EPFL), Switzerland) ; Zufferey, Nicolas (University of Geneva, Switzerland) ; Cheikhrouhou, Naoufel (Haute école de gestion de Genève, HES-SO // Haute Ecole Spécialisée de Suisse Occidentale)

Inventory managers do not predominantly follow normative optimization models. At best, they introduce a level of bounded rationality in their inventory replenishment decisions. This paper examines the behavior of inventory decision-makers under continuous review in a decentralized supply chain, using an experimental approach with unknown market demand and local information availability. The analysis reveals that not only the magnitude and the variability of order quantity tend to be larger, but also that the order-time intervals is lengthen and highly variable while moving upstream along the supply chain. The role of the inventory managers replenishment decisions on the echelon holding, backorder, and total costs, is also investigated. Finally, a normative model is designed and its solutions are compared to the experimental results. It is observed that humans do not operate in a perfectly optimal way, but are generally reluctant to risk increasing backorder costs and reducing inventory carrying cost, even if this would lead to lower total cost.


Keywords:
Article Type:
scientifique
Faculty:
Economie et Services
School:
HEG - Genève
Institute:
CRAG - Centre de Recherche Appliquée en Gestion
Subject(s):
Economie/gestion
Date:
2019-03
Pagination:
22 p.
Published in:
International Journal of Logistics Systems and Management
Numeration (vol. no.):
2019, vol. 32, no 3-4, pp. 322-345
DOI:
ISSN:
1742-7967
Appears in Collection:



 Record created 2018-03-22, last modified 2019-11-28

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