Mathematical models for minimizing customer response time in two echelon supply chain systems

Supply chain management (SCM) is the management of all activities associated with the procurement of raw materials, transformation of raw materials into finished products, and distribution of products to customers. SCM is a philosophy that promotes cooperating partnerships and information sharing between non-competing organizations within a given supply chain network. Its aim is to present a holistic view of the supply chain as one functional system such that overall system performance is optimized as opposed to the traditional perception as several systems operating independently. The SCM literature is saturated with examples of the cost savings that results from integrating supply chain activities and information sharing throughout the supply chain system. However, in a market characterized by impatient, demanding customers and unyielding competition among organizations, the performance of a supply chain should not only be measured by cost savings, but should also include customer oriented objectives such as customer response time. Experts have identified response time as a means by which firms can gain competitive advantage, but very few have connected the concepts of customer responsiveness and SCM. In fact, the concept of response time is practically nonexistent in the mathematical supply chain literature.; In this dissertation several mathematical models are developed in which customer response time is explicitly modeled as part of various cost functions. Intuitively, any reduction in response time constitutes an increase in operating costs. Hence by integrating traditional cost-based objectives and response time objectives into one model, closed form solutions of such models allow the decision maker to adjust decision variables so that the desired levels of responsiveness and cost minimization can be achieved. The proposed models are composed of both deterministic and stochastic parameters and optimal solutions are derived in closed form on several occasions. For problems that are not tractable, heuristic techniques are used to determine solutions. This research combines original ideas with well accepted past research and also presents several opportunities for future research directions. It is the hope of the author and research supervisors that this dissertation stimulates further research in the area of responsiveness in mathematical supply chain models.