Title: Managing unreliability in automotive supply networks – an extension of the joint economic lot size model

Authors: Tim Gruchmann; Marcus Brandenburg

Addresses: Centre for Sustainable Corporate Leadership, Witten/Herdecke University, Alfred-Herrhausen-Straße 50, 58448 Witten, Germany ' Flensburg University of Applied Sciences, Kanzleistraße 91-93, 24943 Flensburg, Germany; Chair of Supply Chain Management, University of Kassel, Kleine Rosenstraße 1-3, 34117 Kassel, Germany

Abstract: Within assembly network supply chains, supply disruptions can occur on every supplier-buyer link. Managing this network unreliability can help to reduce schedule instability and increases the overall efficiency of the supply chain accordingly. In this line, a stylised assembly network supply chain model is proposed with two suppliers and a single buyer using the joint economic lot sizing approach. This supply network can be disrupted by a shortage occurring at one of the two suppliers due to random machine breakdowns, which consequently creates dependent requirements variations affecting both the buyer and the entire network. First, the basic joint economic lot sizing model is extended by the said schedule instability. Second, a solution approach is presented concerning the determination of optimal lot sizes, the investment into the reliability of the supply network as well as the determination of safety stocks. Furthermore, the sensitivity of relevant model parameters is investigated by means of a numerical example. Managerial implications are accordingly derived focusing on the reliability of the supply network members and internal incentive structures.

Keywords: schedule instability; automotive supply networks; joint economic lot sizing; supply unreliability; safety stocks.

DOI: 10.1504/IJOR.2020.108838

International Journal of Operational Research, 2020 Vol.39 No.1, pp.50 - 68

Received: 17 Mar 2017
Accepted: 09 Jan 2018

Published online: 29 Apr 2020 *

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