Title: Stochastic automata and supply chain agility in the time-limited supply industry

Authors: James Wallace, Anastassios Tsoularis, Rana Tassabehji

Addresses: School of Management, University of Bradford, Emm Lane, Bradford BD9 4JL, UK. ' Institute of Information and Mathematical Science, Massey University, Auckland, New Zealand. ' School of Management, University of Bradford, Emm Lane, Bradford BD9 4JL, UK

Abstract: This paper presents a stochastic automaton approach to stock ordering for retailers of time-limited goods, in the modern supply chain network. The rationale applied is that by ordering in small quantities frequently, overstocking will be reduced, capital liquidity improved and wastage limited. A consequence for the complete supply chain is that such an approach could substantially minimise the reactive bullwhip effect, leading to more efficient utilisation, production and agility throughout the chain. Such agility and flexibility can only be achieved by full integration of stock inventory monitoring technologies (such as RFID) with enterprise integration systems (such as ERP) connected to suppliers, mediated by the internet. We undertake a comparative simulation study of stock ordering using a stochastic automaton and a naive traditional approach. This shows that stochastic ordering, prompted by a stochastic automaton, exhibits characteristic properties that are a prerequisite for reducing the bullwhip effect, thus enabling agile inventory management.

Keywords: agile management; bullwhip effect; internet technology; retail ordering; stochastic automaton; agile supply chains; agility; agile systems; time-limited goods; supply chain networks; stock ordering; simulation; inventory management.

DOI: 10.1504/IJASM.2006.011632

International Journal of Agile Systems and Management, 2006 Vol.1 No.4, pp.407 - 421

Available online: 06 Dec 2006 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article