Supply Chain Model on Uncertainty Demand

Dewi Gusti, Lolyta Damora Simbolon, Yuan Anisa, Liza Setyaning Pertiwi

Abstract: The life cycle of new product is becoming shorter and shorter in all markets. Given these short product life cycles, product demand is increasingly difficult to forecast. Furthermore, demand is never really stationary because the demand rates evolves over the life of the product. In this paper, we consider the problem of where in supply chain to place strategic safety stocks to provide a high level service to the final customer with minimum cost, and extend the model for stationary demand to the case of stationary demand, as might occur for products with short life cycles. We assume that we can model the supply chain as a network that each stage in the supply chain operates with a periodic reviuw base-stock policy, that demand is bounded and that there is guaranteed service time between every stage and its customers. This study uses the analytic solver program in excel that does the randomization process on the variable demand.

Keywords: nonstationary demand, multistage supply chain application, safety stock optimization