Chul Soo Kim , Garp Choong Kim

The KIPS Transactions:PartD, Vol. 10, No. 1, pp. 161-166, Feb. 2003
10.3745/KIPSTD.2003.10.1.161,   PDF Download:

Abstract

Information lead time is defined as the time spent by processing orders from some buyers, whereas order lead time is defined as producing and supplying the products. The information lead time significantly serve to magnify the increase in variability due to demand forecasting. This paper models a decentralized supply chain composed of cascade type which has four type phases (or divisions) such as retailer, wholesaler, distributor, and factory. Each phases is managed by different centers individually with their own local inventory information. We investigate whether each phase's information lead time affects companies networked a value chain. In particular, on several experiments performed with a programmed simulation (like a MIT beer game), we study the following questions Can information lead times do better than material lead times in cost-benefit perspective? Can more much information lead times in downstream reasonably do worser than in upstream when playing the simulation? In the conclusion, we show the importance of information lead time on a SC and, besides, guarantee that improvement of information lead time in upstream do more effective than one in downstream in cost-benefit perspective.

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