Calculating the cost of variances in the supply chain - Determining supplier and buyer effect on inventory performance

The purpose of this work is to provide a framework that can be used to diag nose the causes of inventory-related variances in the buyer-seller relation ship, and to analyze the costs to the channel associated with these varianc es. A multi-echelon approach is used to highlight variances caused by both supplier and buyer in increasing detail. The framework's usefulness lies in its ability to separate variances caused by inadequate planning from those caused by poor performance, (C) 2000 Elsevier Science Inc. All rights rese rved.