Determination of an SCI's effect on costs and capital commitment
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Chapter 4 introduces the conceptual framework of the developed quantification approach that enables an individual roll-over of SCIs by respective players along the supply chain. Chapter 5 provides a determination model for the revenue contribution while the present chapter addresses the calculation of an SCI's impact on cost and capital commitment. The subsequently introduced model is based on a system dynamics-based simulation focusing in particular on inventory levels and associated logistics costs of a supply chain player (e.g., Shapiro, 2007: 240f.; Sterman, 2000). Accordingly, the approach is mainly suited to SCIs addressing the material flow of manufacturing companies. The simulation is embedded in the conceptual framework introduced in Chapter 4 that allows the combination of the supply chain perspective with that of a single player, as well as the consideration of the individual roll-over of SCIs on specific suppliers and customers. Consequently, the generated value within a supply chain is determined by the simulation of each player on an echelon and the extrapolation of the financial effects.
KeywordsSupply Chain Inventory Level Order Quantity Service Level Agreement Supply Chain Partner
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