How Much Can We Spare with E-business: Examining the Effects in Supply Chain Management
InSITE 2004
• Volume 4
• 2004
In this paper we concentrate on one aspect of e-business applications, namely on its effects in supply chain management. We derive a mathematical model that shows how different changes in ordering costs as a result of using e-business can affect the optimal ordering intervals and quantity, average stock level and consequently total inventory-related costs. We study the sensitivity of the objective function of the average cost approach to finite magnitude perturbations of some of the system parameters which influence the optimal ordering policy. We deal with the detailed coordination case of two-level model and determine the conditions in which the model is sensitive to the variation of system parameters.
Internet, e-business, sensitivity analysis, finite magnitude perturbations, optimal ordering policy, average cost approach
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