Volume : 4, Issue : 1, JAN 2018

FLEXIBILITY AS A FUNCTION OF ORDER QUANTITIES AND LEAD-TIMES IN SUPPLY CHAIN

MOHAMED BAYMOUT

Abstract

It is assumed that a good supply chain distributes the uncertainties of both parties evenly between the partners. Supply chain flexibility is introduced as the relationship between the buyer and supplier under varying supply conditions. A higher flexibility relationship allows for more consistent procurement pricing regardless of changing supply condition. The flexibility is measured with respect to varying order quantities and supply lead times in which an estimate of the procurement price is determined through procurement behavior. Through survey, it was determined that order quantities and supply lead-time are the most common parameters that are critical in the buyer-supplier relationship. Using the model proposed in this paper, a buyer can estimate the flexibility of the potential suppliers and make a decision based on the measurements of this parameter to best fit the business.

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