Title: Management of demand uncertainty in supply chain cost planning

Authors: Dharamvir Mangal; Tarun Kumar Gupta

Addresses: The Technological Institute of Textile and Sciences, Bhiwani, Haryana, India ' NGF College of Engineering and Technology, Palwal, Haryana, India

Abstract: Cost effective supply chain management under various market, logistics and production uncertainties is a critical issue for companies in the current development. Reservations in the supply chain usually increase the variance of profits (or costs) to the company, increasing the likelihood of decreased profit. Demand uncertainty, in particular, is an important factor to be considered in the supply chain design and operations. To hedge against demand uncertainty, safety stock levels are commonly introduced in supply chain operations as well as in supply chain design. In this paper, the authors proposed the use of deterministic planning and scheduling models which incorporate safety stock levels as a means of accommodating demand uncertainties in routine operation.

Keywords: supply chain management; SCM; production planning; demand uncertainty management; customer satisfaction level; safety stock levels; supply chain costs; cost planning; scheduling.

DOI: 10.1504/IJLSM.2015.072746

International Journal of Logistics Systems and Management, 2015 Vol.22 No.4, pp.399 - 413

Received: 09 Jun 2014
Accepted: 17 Aug 2014
Published online: 28 Oct 2015 *

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