Effective Leadtime-Cost Tradeoff in Supply Chain Management

ARTHUR HSU and DANIEL D. ZENG

This paper appears in: The International Journal of INTELLIGENT CONTROL AND SYSTEMS
Publication Date: December 2005
Volume: 10, Number: 4
On page(s): 286- 295

Abstract

Electronic commerce has significant impact on enterprise operations. Businesses are eager to tap into new opportunities such as the proliferation of alternatives in the electronic marketplace, real-time access to supply information including both product price and leadtime, and an efficient inter-business electronic collaboration infrastructure. Yet, to gain competitive advantages from these opportunities, business decision makers must focus on their supply chain configurations and operational flexibility. In this paper, we develop a supply chain model based on a conjunctive/disjunctive network. This model is capable of modeling a wide range of supply chain activities including: transportation mode selection, production rate decision, assembly/ subassembly, supplier selection and subcontracting. We also present an efficient solution procedure that identifies the entire efficient frontier between leadtime and cost in this supply chain model.

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