Strategic Positioning of the Push-Pull Boundary within a Supply Chain: An Ordering Policy Co-ordination Perspective

Abstract

The rapid advancement in IT communication enables the availability of demand data in a seamless manner. One manifestation of this technological advancement within the supply chain (SC) domain has been the emergence of a push-pull boundary (PPB). Push-pull boundary is a virtual demarcation point separating the portion of the SC under decentralized from that operating under centralized information sharing. However, the impact of key issues like adoption of inventory ordering policy characterized by the various echelons of a SC network structure while positioning the push-pull boundary need to be investigated comprehensively (Ahn and Kaminsky, 2005). This paper is concerned with the 'Average Fill Rate' and 'Average Total Inventory Cost' performance behaviour of a SC network structure. These performances typically results from different parameters that involves: (i) inventory ordering policy, (ii) push-pull boundary under the influence of information sharing, (iii) forecasting error, and (iv) lead time and their standard deviations. The study is accomplished via Taguchi experimental design framework and simulation analysis. The results suggest the effect of various factors on SC network system wide performance and identify the appropriate combinations of these factors for optimal performance concerned.