Authors: Dmitriy Shaltayev; Borga Deniz; Robert Hasbrouck
Addresses: Luter School of Business, Christopher Newport University, 1 Avenue of the Arts, Newport News, VA 23606, USA ' Department of Business, Framingham State University, 100 State Street, Framingham, MA 01701, USA ' Luter School of Business, Christopher Newport University, 1 Avenue of the Arts, Newport News, VA 23606, USA
Abstract: A discrete event simulation study is used to investigate the effect of supply variability, demand variability, targeted cycle service level, supply flexibility factor, number of suppliers, and retailer-to-supplier ratio on average transaction cost and observed cycle service level in a two-tiered supply chain with multiple suppliers and multiple retailers. Our findings indicate that transaction cost decreases as demand variability increases or as targeted cycle service level increases. Transaction cost increases as supply variability increases. Observed cycle service level and average transaction cost are not significantly affected by number of suppliers and retailer-to-supplier ratio. Observed customer service level gets worse when supply or demand variability increases, and it improves when supply becomes more available.
Keywords: supply chain management; SCM; newsboy problem; newsvendor problem; discrete event simulation; perishable inventory; perishable supply chains; perishable goods; transaction costs; service levels; supply variability; demand variability; supply flexibility; number of suppliers; retailer-to-supplier ratio.
International Journal of Applied Management Science, 2016 Vol.8 No.2, pp.114 - 131
Received: 06 Feb 2015
Accepted: 27 Sep 2015
Published online: 17 Jun 2016 *