Introduction

Abstract

For many companies, the ability to efficiently match demand and supply is key to their success. Failure to do so could lead to loss of revenue, reduced service levels, impacted reputation, and decline in the company’s market share. Unfortunately, recent developments such as intense market competition, product proliferation, and the increase in the number of products with a short life cycle have created an environment where customer demand is volatile and unpredictable. In such an environment, traditional operations strategies such as building inventory, investing in capacity buffers, or increasing committed response time to consumers do not offer a competitive advantage. Therefore, many companies are looking for effective strategies to respond to market changes without significantly increasing cost, inventory, or response time. This has motivated a continuous evolution of the management of logistics systems.