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Supply Chain

Performance Measures and Performance Models for...

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Performance Measures and Performance Models for Supply Chain Decision Making
Y Narahari and Shantanu Biswas
Numerous models, algorithms, and tools have been deployed in supply chain modeling and decision making. These are based on stochastic models, optimization models, object oriented models, and simulation. This paper provides an expository introduction to decisions, performance measures, mathematical models, and software models in supply chain networks.

1 Introduction
Businesses today operate in a very tough environment that is constantly in flux [46, 57]. Customers have become increasingly demanding looking for better and innovative goods and services that are specifically customized to meet their unique needs. There is also an implicit requirement on the accuracy, timeliness, convenience, responsiveness, quality and reliability of the service offered to them. And all of this is desired at ever-lower prices. Simultaneously, the rapid pace of innovation has resulted in shorter product and technology cycles, leading to uncertainties in supply and demand. An example of this trend is the PC industry,
Source: © Y Narahari and Shantanu Biswas. Reprinted with permission.

98 SUPPLY CHAIN PERFORMANCE MEASUREMENT AND IMPROVEMENT

where new models are introduced every 6 to 9 months under intense competitive pressure on cost, functionality and service. All these challenges ultimately result in managers asking for an outstanding design of the underlying supply chain which happens to be the backbone of any business company. A supply chain is a network of supplier, manufacturing, assembly, distribution, and logistics facilities that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains are now at the centrestage of business performance of manufacturing and...