The time variant, highly dynamic and complex nature of the supply chain makes the standard equations that define the relationship between safety stocks and customer service levels inadequate. In this case study, we used optimization and simulation techniques to analyze various trade-offs and types of flexibilities present in the supply chain of a global manufacturer of lubricants and fuel additives. We determine the safety stock policies based on a flexibility-based categorization of the products and operational performance in terms of production, shipping, and inventory costs and quantities, and customer service.
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