Controlled partial shipments in two-echelon supply chain networks: A simulation study

In an uncoordinated supply chain network involving industrial buyers, the d emand for an item on the vendor is often considerably lumpy, due to the ind ependently derived buyer ordering policies. Thus, the latter's ability to m ake on-time deliveries becomes a critical issue, particularly near the end of its stock cycle or when several orders from different buyers arrive with in a short interval of time. This paper suggests the notion of controlled p artial-order shipments as a means of alleviating the ill effects of such sp oradic demand patterns. Two simple techniques for formulating partial shipm ent policies are suggested in this study. The effectiveness of this notion is tested through a series of simulation experiments and it is shown that p artial shipments can be a desirable way for improving eventual customer ser vice at the retail level of a supply chain system. (C) 2001 Elsevier Scienc e B.V. All rights reserved.