Abstract
Designing a performance evaluation system that is balanced and congruent with a company’s supply chain system mission can be a challenge. After discussing several facets of this problem, this chapter looks at ways of evaluating a SCS’s economic performance. More specifically, it studies the modeling of the revenues and costs necessary to design value-creating networks. Since these networks must be designed to provide superior performance during several years, future results are necessarily uncertain, and the measurement of value-at-risk over the planning horizon considered is also discussed.
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Notes
- 1.
With Excel, this calculation is done using the financial function PMT(r; n 2; initial value).
- 2.
The min is an order point and the max a replenishment level.
- 3.
In North America a hundredweight is equal to 100 pounds (short hundredweight) and in Britain to 112 pounds (long hundredweight).
- 4.
See Rosenfield et al. (1985) for a good discussion of the strategic implications of different forms of cost and revenue curves.
- 5.
Shank and Govindarajan (1993) show how to construct and use value chains covering the whole of an industry.
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Martel, A., Klibi, W. (2016). Performance Evaluation and Value Chains. In: Designing Value-Creating Supply Chain Networks. Springer, Cham. https://doi.org/10.1007/978-3-319-28146-9_2
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DOI: https://doi.org/10.1007/978-3-319-28146-9_2
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