Modeling and simulation of customer dissatisfaction, worker unpunctuality and tolerance to delay in make-to-order supply chains measured through customer lifetime value performance

Abstract

Introduction: We developed a model for a make-to-order supply chain to evaluate the effects of worker unpunctuality, tolerance to delay and word-of-mouth according to customer waiting time (dis)satisfaction in four customer lifetime value measures (CLTV): switching customers, the number of sales per customer, the average customer loyalty and the potential market reached. Methods: We developed a hybrid (agent-based and discrete-event) simulation in a 33 * 4 experimental design. Results: All of the variables were significant in the four CLTV measures, except for tolerance to delay. The positive word-of-mouth effect was greater than the negative word-of-mouth effect. There were significant interactions between positive and negative word-of-mouth. Conclusions: This type of model becomes a decision support tool for businesses to evaluate their mid-to-long term performance taking into account their customers’ long-term behaviors and the relationships between potential customers in repetitive and competitive environments.