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ABSTRACT
This paper uses a simulation framework to analyze the impact of combinations of the boundary location between push-based and pull-based supply chain strategies and information quality levels on various measures of supply chain performance. The boundary location is found to significantly affect all the measures of supply chain performance. Information quality is found to have a significant effect on system inventory.
Introduction
Many companies achieve significant competitive advantage through the appropriate configuration and management of their supply chain (Croom, Romano and Giannakis, 2000). Supply chains are global networks used to deliver products and services from raw materials to end customers combining information flows and physical distribution. The basic objective for the management of supply chains is to create value. Typically, this objective is accomplished through identifying and implementing an appropriate supply chain strategy for synchronizing supply and customer demand by integrating all stages of the supply chain.
Supply chain strategies are often categorized as push, pull, or hybrid strategies. Push strategies make manufacturing decisions in anticipation of customer orders. Pull strategies make decisions in response to customer orders. In a hybrid or push-pull strategy, the initial stages follow a push strategy and the remaining stages follow a pull strategy. The location or stage at which the focus of the supply chain changes is called the push-pull boundary (PPB).
Location of the PPB is an important element for a successful supply chain strategy. Some important factors in determining this location include the amount of demand uncertainty and availability of economies of scale in production.
Information quality (IQ) can be simply defined as the fitness for use of the information provided. Information is pervasive throughout a supply chain, affecting many of the drivers of supply chain performance.
The research objective of this analysis is to empirically investigate the effects of various PPB locations in a supply chain and various IQ levels on selected supply chain performance measures. The major contribution of this study is that it is the first one to specifically analyze the impact that the PPB location may have on supply chain performance. In addition, the impact that IQ may have is extended from earlier studies.
The remaining sections of this paper discuss various aspects of this study, including (1) the relevant...