Supply chain efficiency: a simulation cum DEA approach

The management of risks within the supply chain and external to it has become highly critical component of supply chain management. Inventory management is a vital tool to mitigate these risks. Lead times and review periods are important parameters in inventory management. The organizations focus on these parameters to enhance the system-wide supply chain performance in terms of services to customers. This paper aims at analyzing the efficiency of total supply chain in context of average fill rate performance. We analyze the efficiency of a hypothetical supply chain network structure which is subjected to time delays due to lead time and inventory review period changes. To understand the optimal relative efficiency among different values of average fill rate performance obtained through simulation, we used Data Envelopment Analysis approach (DEA). Taguchi experimental design procedure is used as a vehicle for conducting the simulation experiments and analyzing its outcome. The proposed integration of simulation with DEA framework provides practical implications to the decision maker as well as connotes to the real world situation where different enterprises compete for the frontier supply chain efficiency.