The impact of the net present value on the assessment of the dynamic performance of e-commerce enabled supply chains

摘要

This paper shows the impact of using the net present value (NPV) on parameter selection in the ordering policy of a production planning and control system. Using a well understood and documented systems dynamics model of a supply chain, the NPV is used as an objective function to determine the discounted future variance costs resulting from the model's dynamics. The NPV of the Variance (NPV_v) is defined and applied to the model under three scenarios; traditional, electronic-point-of-sales enabled and vendor managed inventory. It is shown that the resulting management implications are sensitive to the selection of the NPV_v parameters.