A lagged demand supply chain

15th International Symposium on Inventories, 22nd-26th August, Budapest, HUNGARY.

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Abstract

This research considers a situation that the market demand information available for a supply chain is lagged. The impact of this lagged demand information is quantified by using a serially linked two-level supply chain. It is assumed that each player exploits the order-up-to ordering policy. As the market demand model, a first-order autoregressive (AR(1)) process is assumed. The lead-time and the lag time ( ) are constant over time. The lagged market information and other necessary information are shared with the second-level player. The total inventory cost and the production cost of the supply chain are considered to evaluate the impact of the information lag and forecasting methods.