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Assessing the supply chain performance: a causal analysis

  • Erkan Bayraktar
  • Kazim Sari
  • Ekrem Tatoglu
  • Selim Zaim
  • Dursun DelenEmail author
Original Research

Abstract

Measuring the performance-related factors of a unit within a supply-chain is a challenging problem, mainly because of the complex interactions among the members governed by the supply chain strategy employed. Synergistic use of discrete-event simulation and structural equation modeling allows researchers and practitioners to analyze causal relationships between order-fulfillment characteristics of a supply-chain and retailers’ performance metrics. In this study, we model, simulate, and analyze a two-level supply-chain with seasonal linear demand, and using the information therein, develop a causal model to measure the links/relationships among the order-fulfillment factors and the retailer’s performance. According to the findings, of all the order-fulfillment characteristics of a supply-chain, the forecast inaccuracy was found to be the most important in mitigating the bullwhip effect. Concerning the total inventory cost and fill-rate as performance indicators of retailers, the desired service level had the highest priority, followed by the lead-time and forecast inaccuracy, respectively. To reduce the total inventory cost, the bullwhip effect seems to have the lowest priority for the retailers, as it does not appear to have a significant impact on the fill rate. Although seasonality (to some extent) influences the retailer’s performance, it does not seem to have a significant impact on the ranking of the factors affecting retailers’ supply-chain performance; except for the case where the backorder cost is overestimated.

Keywords

SCM Retailers’ performance Service level Bullwhip effect Causal analysis 

Notes

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© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.College of Engineering and TechnologyAmerican University of the Middle EastEgailaKuwait
  2. 2.Department of Industrial EngineeringBeykent UniversityMaslak, IstanbulTurkey
  3. 3.College of Business AdministrationUniversity of SharjahSharjahUnited Arab Emirates
  4. 4.School of BusinessIbn Haldun UniversityIstanbulTurkey
  5. 5.Department of Industrial EngineeringIstanbul Sehir UniversityDragos-Kartal, IstanbulTurkey
  6. 6.Department of Management Science and Information Systems, Spears School of BusinessOklahoma State UniversityTulsaUSA

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