Abstract
Coordination problems arise in supply chains characterized by multiple customer segments differentiated by their service requirement (in terms of product availability or fillrates) and their willingness to pay for such service. The purpose of this chapter is to study strategies and methodologies for managing service differentiated customer classes in a supply chain. Our research approach is to combine extensive field studies with rigorous analysis. We build model frameworks based on our experience with a leading manufacturer of semiconductor testers and a research project for a military service parts supply chain. We study two particular service differentiation strategies: (1) Service differentiation based on delivery lead times, and (2) Service differentiation based on inventory rationing. We draw practical conclusions of managerial interest from our models, which can have a significant impact on efficient management of service differentiated supply chains. Our analysis shows that service differentiation is an appropriate strategy for satisfying customer requirements in a cost effective fashion.
This research was supported in part by the U.S. Navy under Contract # NOV391-96-M-M04.
A summer research grant was provided by the Weatherhead School of Management in 2000.
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Cohen, M.A., Deshpande, V., Wang, Y. (2004). Managing Supply Chains with Differentiated Service Requirements—Models and Applications. In: The Practice of Supply Chain Management: Where Theory and Application Converge. International Series in Operations Research & Management Science, vol 62. Springer, Boston, MA. https://doi.org/10.1007/0-387-27275-5_11
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DOI: https://doi.org/10.1007/0-387-27275-5_11
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