Dattaraj Kamalapurkar

Doctoral Dissertation Announcement

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Candidate: Dattaraj Kamalapurkar

Degree of: Doctor of Philosophy

Department: Industrial and Manufacturing Engineering

Title: Benefits of CPFR and VMI Collaboration Strategies in a Variable Demand Environment

Committee:
Dr. David Lyth, Chair
Dr. Timothy Greene
Dr. Robert Landeros
Dr. Azim Houshyar
Dr. Steven Butt

Date: Wednesday, August 3, 2011 10:00 a.m. to Noon
Parkview Campus, Room D-212

Abstract:
In recent years, practitioners and academic researchers have emphasized that organizations need to collaborate with suppliers and customers to improve their competitive advantage. The availability of cost efficient information technologies like EDI, XML, etc. have made it possible to develop and implement many forms of collaboration strategies. Among them, Vendor Managed Inventory (VMI) and Collaborative Planning, Forecasting and Replenishment (CPFR) are most popular, which are considered for this study. While many studies have identified the benefits of demand information sharing in supply chains, however benefits of VMI and CPFR in a variable demand environment are not well established in the literature.
This study uses discrete event simulation to investigate benefits of VMI and CPFR over Traditional Supply Chain (TSC) in a variable demand environment. The conceptual model is a two echelon production-inventory system with a manufacturer (plant and warehouse) and a retailer. Demand forecast for both manufacturer and retailer is developed using exponential smoothing forecast technique. Periodic review order up-to inventory policy is used to determine order quantity for retailer and production quantity for manufacturer during each period. The order up-to level is calculated to minimize total inventory holding cost and backorder penalty cost. The manufacturer has a production lead time of one period and has capacity constraints and any demand not met during the period is backordered. Similarly, retailer fulfills their customer demand from available inventory and any demand not met during the period is backordered.
Three different supply chain simulation models (TSC, VMI and CPFR) are developed to investigate the cost benefits of CPFR and VMI over TSC. Supply chain strategy, demand variability, production capacity, backorder penalty cost, and delivery lead time are used as control variables. Manufacturer cost and Retailer cost are used as performance measures. The outputs from these models are analyzed to identify important variables to provide valuable managerial insight that help increase the cost benefits of CPFR and VMI collaboration strategies for both the manufacturer and the retailer in a variable demand environment.