The impact of batching on supply chain costs in a schedule sharing environment.

摘要

One of the major problems observed in many supply chains is so called “Bullwhip Effect”. Bullwhip effect is the increasing demand variability for components as one moves upstream a supply chain. To manage this variability, firms keep higher inventories, or higher capacity, leading to increased costs and inefficient use of production resources all over the supply chain.; One of the identified causes of the bullwhip effect is batching. Most companies place orders in batches, rather than whenever need arises. The relatively high cost of placing orders (such as order processing and transportation), is one reason to have larger sized orders placed less frequently.; This study evaluates four different batching methods in reducing the bullwhip effect in a n environment in which two companies (an assembler and a supplier) share ordering schedule information. The batching methods include EOQ, a size less than EOQ, LFL and Rate. Performance of the system is measured by assembler's stock-out level, assembler's costs, suppliers costs, and the sum of both assembler's and supplier's costs.; Through simulation experiments, the behavior of the two-company system is observed in two cases: (1) make-to-order supplier case, and (2) make-to-stock supplier case. The operating factors in the system include assembler's freeze length (shared schedule length), supplier's lead-time, and supplier's expediting cost function. A rolling horizons procedure is followed to simulate the system.; The results indicate that switching from a batching method that optimizes local benefits (such as EOQ) to a smaller batch size can lead to significant cost savings at the supplier. The extent of savings depends on the cost structure and nature of the supplier (make-to-stock, make-to-order) in the supply chain environment. In the specific environment under study, in general, as the assembler reduces batch sizes in its orders, its total cost increases and supplier's total cost decreases. As long as the cost decreases in the supplier surpasses the cost increases in the assembler, smaller batch based coordination in the chain is feasible.