THE UNIVERSITY OF TEXAS AT AUSTIN, 1998
BUSINESS ADMINISTRATION, MANAGEMENT (0454); BUSINESS ADMINISTRATION, MARKETING
(0338)
This research addresses issues pertaining to the management of supply chains
in a short life cycle
environment. Shorter product life cycles present new challenges to managing
production and logistics
not adequately addressed in supply chain literature. This dissertation attempts
to bridge this gap in the
literature by developing models that incorporate the unique characteristics
of fast-paced industries.
Moreover, we explore the supply chain issues from a cross-functional perspective
by integrating
marketing and operational decisions. In the first part of this research, we
investigate conditions under
which it is profitable for manufacturers to disregard Laggards--customers who
buy a product towards the
end of its life cycle. We base our study in the context of the business environment
faced by direct sales
manufacturers in the personal computer industry. Using an analytical model that
integrates innovation
diffusion dynamics with supply-side dynamics we provide a systematic approach
that can guide firms in
making decisions on the portion of the potential market that they should plan
to serve. The analysis also
provides a characterization of the optimal procurement policy over the life
cycle of the product. In the
second part of the research, we compare the direct and indirect models of distribution
for short life cycle
products. First, we develop optimal inventory policy of an indirect manufacturer
by explicitly taking into
account the stochastic demand process transferred by the retailer to the manufacturer.
Second, we
demonstrate that due to the special inventory cost structure of the technology-based
short life cycle
products, inclusion of an additional stage in the distribution channel has a
significant negative impact on
the total supply chain costs. Finally, we offer an explanation for demand distortion
that can occur in short
life cycle supply chains. In the third study, we develop a model that takes
advantage of real time demand
information in making inventory management decisions. Using time series demand
data from a personal
computer manufacturer, we develop a methodology to estimate the distribution
of demand. We then
formulate a finite horizon stochastic dynamic program that dynamically adjusts
inventory levels using the
updated demand information. Solution of the dynamic program indicates that significant
savings in
inventory-related costs can be realized by using the proposed methodology.
Social
Systems Simulation Group
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