Study On The Lead Time Strategies Of Vendors In A Supply Chain

With increasing economic integration and rapidly development of informantion technolodge, customers has been more and more demanding, lead time has been more and more important. Market competition has present new characteristics. Competitions happen between supply chains rather than between Enterprises. Competition based on quality and cost has been changed to competition based on time. Time Based Competition in supply chain has been the dominant strategy. The capability to response customer demand rapidly has been accepted as a key to success. The responsiveness of a supply chain is determined by the lead time between stages. Lead time reduction has been the focus in supply chain management and operations management. However, not all the suppliers obtain benefits in lead time reduction. Enterprises case study has shown that a lot of companies suffered loss because of excess time compression. How to use aptitude lead time strategy to reponse demand so as to increase profit is an important problem to suppliers in Time Based Competition. As a result, suppliers' lead time strategy in supply chain pattern is studied in our research.A lot of research on lead time management has been carried out on the lead time impact of supply chain performance, the fators which influence lead time and lead time decisions. A few important theories and solutions have been put up. However, these methods mainly focused on lead time impact on operation performance. Few research studied lead decisions. Besides, these studies rarely consider the impact of lead time decisisons on the other stages in a supply chain.Due to the problems in previous research, studies and investigations are made in this thesis from the following aspects:1. Analysisi on Vendor's single lead time strategy with MTS buyers. Vendor's lead time strategy based on lead time compression cost allocation is presented. Some discussion is made on this strategy. With the cost allocation ration decreasing, setup cost and producing cost decreasing, retail price increasing, the vendor should shorten the length of lead time. The vendor can design a lead time strategy which can be accepted by the buyer through changing the cost allocation ratio to decrease total operation cost.2. Analysisi on Vendor's multiple lead time strategy with MTS buyers. The research focuses on vendor's perishable products multiple lead time strategy. Buyer's ordering policies is studied under different lead time pattern. Some factors influence buyer's decision and profit such as the value of information and wholesale prices under different lead time pattern are analyzed. Finally, in the condition update information is perfect, the precondition the vendor chooses multiple lead time strategy is presented.3. Analysisi on Vendor's single lead time strategy with MTO buyers. Customer's waiting time cost is introduced to measure the customer's sensitivity to lead time. With production and capacity cost increasing, lead time reliable level increasing, customer demand sensitivity of payment decreasing, the vendor should guaranteed lead time longer. With customer sensitivity of time increasing, market total potential demand increasing, the vendor should shorten lead time guarantee. Futhermore, the subjective value diffenrence between customers is considered. With customer time sensitivity increasing, decreasing, demand arriving rate increasing, the vendor should shorten the length of lead time. The impact of customer payment reservation diffenrence and product price on guaranteed lead time decision decrease, with customer time sensitivity increasing.4. Analysisi on Vendor's multiple lead time strategy with MTO buyers. In spite of different kinds of customers in market, as long as price and lead time compression amount takes linear relationship, the vendor should provide only two supply pattern. One is the normal pattern, the other is urgent pattern. Some discussions are made in guaranteed lead time decisions. With production and capacity cost increasing, lead time reliability increasing, the vendor should longthen the length of lead time. With market potential demand increasing, the ratio of time-sensititive customers increasing, the vendor should shorten the length of lead time.5. Analysisi on the impact of vendor's lead time on buyer's service level decision. Customers' patience value is introduced and customers' buying behavior is considered. As long as the stockout loss is companied with customers' waiting time, the length of vedor's lead time will influence buyer's customer service level decision. With length of lead time increasing, customers' patience value decreasing, the buyer should increase the customer service level.