In this paper, we investigate the dynamic behavior of a simple service-oriented supply chain in the presence of non-stationary demand using simulation. The supply chain contains four stages in series. Each stage holds no finished goods inventory.Rather, the order backlog can only be managed by adjusting capacity. These conditions reflect the reality of many service (and custom manufacturing) supply chains. The simulation model is used to compare various capacity management strategies. Measures of performance include application completion rate, backlog levels, and total cumulative costs.
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