Matching Supply with Demand An Introduction to Operations

Matching Supply with Demand: An Introduction to Operations Management Gérard Cachon Christian. Terwiesch All slides in this file are copyrighted by Gerard Cachon and Christian Terwiesch. Any instructor that adopts Matching Supply with Demand: An Introduction to Operations Management as a required text for their course is free to use and modify these slides as desired. All others must obtain explicit written permission from the authors to use these slides. Slide 1

Bullwhip effect in autos to machine tools Machine tools % change in demand Autos GDP = solid line Source: Anderson, Fine and Parker (1996) Slide 2

Bullwhip effect in the US PC supply chain Annual percentage changes in demand (in $s) at three levels of the semiconductor supply chain: personal computers, semiconductors and semiconductor manufacturing equipment. Slide 3

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Order synchronization § Customers order on the same order cycle, e. g. , first of the month, every Monday, etc. § The graph shows simulated daily consumer demand (solid line) and supplier demand (squares) when retailers order weekly: 9 retailers order on Monday, 5 on Tuesday, 1 on Wednesday, 2 or Thursday and 3 on Friday. Slide 6

Order batching § Retailers may be required to order in integer multiples of some batch size, e. g. , case quantities, pallet quantities, full truck load, etc. § The graph shows simulated daily consumer demand (solid line) and supplier demand (squares) when retailers order in batches of 15 units, i. e. , every 15 th demand a retailer orders one batch from the supplier that contains 15 units. Slide 7

Trade promotions and forward buying § Supplier gives retailer a temporary discount, called a trade promotion. Retailer purchases enough to satisfy demand until the next trade promotion. § Example: Campbell’s Chicken Noodle Soup over a one year period: § Total shipments and consumption One retailer’s buy Slide 8

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